Dec 2, 2019 · 39m · 20vc
20VC: BoxGroup's David Tisch on Whether Concentrated Investing At Seed Works, Do Founders Really Want Direct Feedback and Is It Good For Them & Why Consumer Social Is Interesting Again
0:00 / 0:00
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews David Tisch, co-founder of BoxGroup, exploring BoxGroup's evolution into institutional LP funding, collaborative seed-stage investing, and the realities of founder-VC relationships. Tisch also shares insights on navigating saturated digital marketing channels, evaluating early-stage consumer metrics, and the emerging opportunities in consumer social platforms.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 30.1% of the talking time here. How this is scored →
Harry as informed peer 3.4 Guest teaching 3.5 Guest disagreement 1.4 Harry pushing back 2.3
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 14:11 VC Podcast Blame
Tisch playfully jabs Harry, telling him that if venture capitalists are overly glorified, Harry's 2,000 podcast episodes are largely to blame.
Hardest push from Harry ▶ 9:38 Fund Math PushbackHarry refuses to gloss over fund economics, directly challenging Tisch on how a fund can deliver top-tier returns without forcing strict ownership targets on founders.
Biggest teaching moment ▶ 31:00 The Reality of Rejection FeedbackTisch reframes Harry's approach to founder feedback, explaining that most founders do not actually want radical transparency when a pass is based on team dynamics.
Harry holds his own ▶ 23:27 Citing Peter Fenton on DistributionHarry demonstrates deep sector familiarity by referencing Peter Fenton's insights on distribution channels and pushing back on the relevance of early CAC figures.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Podcast Sponsors: Carta, Brex, and RankScience | 0 | 0 | 0 | 0 | Introductory segment featuring host monologue and sponsor reads for Carta, Brex, and RankScience without guest interaction. | |
| David Tisch's Journey from Techstars to BoxGroup | 1 | 2 | 0 | 0 | Harry welcomes David Tisch back to the show after four years and asks about his career trajectory from Techstars to BoxGroup. | |
| Transitioning BoxGroup to External LP Capital | 4 | 3 | 1 | 2 | Harry quotes Andy from Uncork regarding how LP capital can make seed investors more conservative, prompting Tisch to explain his fund's LP transition. | |
| Collaborative Seed Investing vs. Ownership Control | 5 | 4 | 2 | 4 | Harry presses Tisch on fund math and power law dynamics, questioning how a non-lead seed model can return institutional fund sizes without strict ownership. | |
| Debunking the VC 'Company Builder' Myth | 4 | 5 | 3 | 3 | Tisch humorously places the blame on Harry's podcast for VC glorification while debunking the myth of VCs as company builders and explaining why founders rarely speak out publicly. | |
| Managing Compressed Fundraising Timelines and Building Trust | 3 | 4 | 1 | 2 | Harry asks how trust can be established in fast-moving rounds, leading Tisch to break down the operational choices between rigid discipline and fast market adaptation. | |
| Stepping Back from Twitter and the Rise of 'Unicorn Hunters' | 4 | 5 | 3 | 4 | Harry highlights Tisch's contrarian stance that there is not too much money in tech, allowing Tisch to critique talent dilution and explain capital necessity given high modern acquisition costs. | |
| Evolving Distribution Channels and Community-Driven Brands | 5 | 4 | 1 | 3 | Harry cites Peter Fenton regarding open distribution constraints and voices skepticism over early-stage CAC metrics, which Tisch agrees with while pointing to Glossier's community model. | |
| The Return of Consumer Social and Generational Product Shifts | 3 | 4 | 1 | 2 | Tisch explains why consumer social is ripe for innovation, citing platform fatigue among users and a generational disconnect in product development for 18-25 year olds. | |
| Post-Mortems on Missed Deals and the Nuance of Founder Feedback | 4 | 5 | 2 | 3 | Harry shares his struggle with providing rejection feedback to founders, and Tisch advises against radical transparency when passes are tied to subjective team evaluations. | |
| Quickfire Round: TV Hits, Amazon Impact, and Venture Realities | 4 | 3 | 2 | 2 | Harry conducts a rapid-fire session touching on TV shows, co-investor dynamics, Amazon's consumer value, and the emotional toll of founder failures. |
Statements from this episode (28)
BoxGroup raised over $160 million across two first external vehicles
“Recently, they raised their first external capital with two separate vehicles totaling over a hundred and sixty million dollars.”
Tisch: Venture capital feedback loops take 10 to 15 years, not 7
“And so in this business where the feedback loop is somewhere between, they used to say seven to 10 years, but it's really 10 to 15 years, only 10 years in did I get comfortable that we might have a clue what we're doing.”
Tisch: BoxGroup missed follow-on opportunities due to limited capital
“I think at the same time, when we look back at the past 10 years, I think we've just left a lot of opportunities on the table. So as we found great companies, the ability to continue to follow on and increase our check size and be a bigger partner to those fou…”
Tisch: BoxGroup invests $200K-$500K per startup and rarely leads seed rounds
“And so our check size typically ranges from basically 200,000 to 500,000. We're typically not the lead of a traditional seed round. We will lead a pre-seed round.”
Tisch: Seed rounds should prioritize collaboration over ownership targets and board seats
“Our view is that seed should be a collaborative experience for both The founders and the investors in the sense of a founder wants to surround themselves with a group of people that can ideally create the right infrastructure for them to lean on as they go abo…”
Tisch: Outlier returns solve VC fund economics regardless of entry valuation
“The best companies will make all the math work, no matter what your check size, no matter what your entry point. And obviously that sort of stops at some scale, but if you are an early investor in one of the sort of unique once in a decade, once every five yea…”
Tisch: Increasing seed ownership in later rounds is usually false hope
“I think building ownership after your first check is probably hard as a seed investor because series A, series B is just so competitive and the idea of increasing ownership in those rounds feels like a false hope most of the time or adverse selection.”
Tisch: Company Success Depends on Founders, Not Venture Capitalists
“I generally think that, and your podcast is probably helping this in many ways, in a good and bad way, there's too much focus on the venture capitalists. There's too much focus on the investors. At the end of the day, why companies are successful is because a …”
Tisch: VCs cannot deploy 'company building' value at scale across portfolios
“And so the idea that a diverse portfolio is amongst the VC can deploy this value add and company building at scale. I just haven't seen that happen over my 10 years doing this.”
Tisch: Founders avoid public VC criticism to protect future fundraising
“It's incredibly hard to be public about bad experiences, because as an entrepreneur, as a founder, you at some point will need to go back to market, and if you're viewed in any way as a risk, that just lowers the probability that you're going to get the outcom…”
Tisch: Fast venture rounds prevent proper founder-VC diligence
“In this current market that we're in, this speed that rounds are happening, it is very hard to get to know people on either side. For us as an investor to get to know a founder very well, and as a founder to get to know an investor.”
Tisch: Investor-provided reference calls are inherently biased
“If you're simply asking an investor for a set of references, and sometimes you can say, can you introduce me to a founder that hasn't worked and a founder that has, you're still getting a biased pick there.”
Tisch: Sitting between disciplined and adaptive VC strategies is dangerous
“So I think you see great firms with amazing returns just stay incredibly disciplined. Whether that's Harrison Metal or an IA Ventures, it feels like they don't change their playbook. And then there's other firms that are totally adaptive to a market condition …”
David Tisch: The era of startup romanticism has officially ended
“And I think we've gotten to the point where the romanticism of startups is gone.”
Tisch: Rising startup valuations created hostile 'unicorn hunters' on social media
“So as the sort of word unicorn got spread, what to me has happened is we've seen the development of the unicorn hunter. And so as somebody gets deemed a unicorn, out come the claws and the people trying to kill that unicorn.”
Tisch: The market has too many companies, diluting top startup talent
“I think there are too many companies. So I think the idea that every company is going to succeed and every company deserves to be funded through a series C, that's a risk to me. So there's a massive dilution of talent in our industry in that when everybody sta…”
Tisch: Venture capital is built for rapid scale, not early profit
“I think if your ambition is to build a profitable business, these early on, obviously later on, everybody should, but VC isn't the right weapon. It's VCs to go fast and big”
Tisch: The internet has no remaining free customer acquisition channels
“There is no free customer acquisition channel, there's no arbitrageable channel on the internet, probably for the first time since the internet was born”
Tisch: Digital ad channels on Instagram and Snapchat mature instantly without arbitrage opportunities
“When you see Instagram and Snapchat open up their advertising products, they're basically mature on day one.”
Tisch: Glossier scales through organic core community rather than relying on paid channels
“Glossier is able to scale what they've done, not just through paid. Paid amplifies the community that they've built, this core community that is rabid about their products.”
Tisch: Startups dependent on paid customer acquisition fail without extraordinary conversion rates
“But if you're dependent upon paid acquisition, you're Better be magical, and your conversion rates better be magical as well. Otherwise, the math will break pretty quickly if you can't keep funding that top of the funnel.”
Tisch: No VCs considered dating an interesting category before Tinder
“If you had asked every single venture capitalist at the If dating was an interesting space, nobody would have raised their hand.”
Tisch: Gen Z is not using products built by Gen Z founders
“The youngest demographic that is active on technology, so call it the, like, 18 to 25 year old demo, is not using a product that's built by somebody of their generation.”
BoxGroup tracks all missed seed deals funded by respected firms
“We keep a list of everything that we've either looked at or didn't have an opportunity to see that gets funded by a firm that we have respect for because we assume that somebody sees something in it.”
Tisch: Most early VC passes stem from concerns about the team
“I think very few founders want the radical transparency of why somebody passed, and at the end of the day, a lot of the early passes are around teams.”
Tisch: Hedging your founder conviction lowers your probability of success
“Entrepreneurship is about betting on yourself, and anytime you start hedging that bet, I think you're lowering the probability of success”
Tisch: Tech industry criticism of Amazon ignores core consumer value
“I think that the big companies get punished and shit on by our industry just to sort of feel good. There are total negatives that The big companies are contributing to, but in reality, if you ask a normal consumer, do they love Amazon? Amazon will bring them w…”
Tisch: Watching a hyped startup collapse grounds venture investor expectations
“I think the first feedback loop you get is actually Something that goes all the way up and then all the way back down. And so I think that that's where you are able to find the rational side of this business. So if you for two years, see a company go all the w…”