The Ledger
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D'Augelli: VCs cannot practically increase ownership in top breakout companies
“And so our, you know, call it 20 to 25% at the beginning. If we do everything right, we'll own between 17 and 20% at outcome. But I think it's very difficult over time with success to continue to buy ownership.”
Agarwal: EQ will separate top VC firms over the next decade
“I do think it's what's going to separate the best firms in the next decades to come. I think IQ, if you want to call it, just Being smart, understanding industries. I do believe that's table stakes in a lot of ways. There's a lot of smart people around. A lot …”
Agarwal: True's Best Investments Spark Dissension and Maximize Initial Risk
“There's some dissension in the room, and those are the best investments that tend to go forward, and that, that we make, at least on that first check. We're trying to, as I said before, really maximize risk on that first check.”
Callaghan: True Ventures does not tie partner compensation to deal attribution
“We have no attribution for one. So our, you know, in between our partnership, it's not my deal, yours. That's essential. You know, no one's worried about their own track record. No one's worried about that. It's all about how we support our founders across the…”
General Catalyst and True Ventures accept pre-seed terms set by Besvinick
“In fact, I've had general catalyst, true ventures, tribe, lower carbon that have come in after me after I've said yes and have not altered the terms of those rounds.”
Schneider: Conventional wisdom views decarbonization as a poor VC fit
“Right now, I'm learning or trying to learn about decarbonization to see if there's a seed stage investment opportunity in that space, and it's been challenging because it's a totally new area for me, and also the conventional wisdom is that it's not a good pla…”
Schneider: True Ventures passed on Instagram before its pivot
“So for example, we looked at Instagram really early and it was literally a different product with a different name and we passed on it and then they later pivoted to Instagram. But by then it was too late for us to invest.”
D'Augelli: Half of Ring's products were defective when True Ventures invested
“50% of their products at that point didn't work.”
D'Augelli: Single-lead priced equity rounds build better companies than co-led deals
“We have a meaningful bias towards priced equity rounds with a single lead who have really deep pockets. Somewhat self-serving, but we also think it's the best way to go build very important companies.”
D'Augelli: True Ventures' best investments like Ring and Splice looked weird
“I would say in most of our successful companies over time, they were not perceived as successful in the beginning. Things like Ring or Splice are companies that Today, I think people are like, that's, those are really interesting businesses, but there were kin…”
True Ventures targets 20% seed ownership with $2M median checks
“And so, you know, to dive in on True, we manage funds of roughly three hundred million, and really focus on leading the first round of institutional capital, usually pre-seed or seed, with investments of 500 K to three and a half million, targeting 20 to 25% i…”
Agarwal: 40% to 50% of True Ventures investments will fail
“We are very open about the fact that 40 to 50% of the companies we invest in will probably lose or go to zero.”
True Ventures let founder keep $5M investment following cancer diagnosis
“There was a company and I've been a little bit open about this, but there was a company that we put five million dollars into the company on the day of wiring. The CEO called me and said that he was diagnosed with colon cancer. And that he didn't have a long t…”
Agarwal: Spending time mainly with winning portfolio companies is flawed advice
“Some of the time allocation statements that people make about, Hey, you need to spend more time with the winners are maybe a little bit off base because maybe you actually don't need to spend as much time because they're doing just fine.”
True Ventures Operates Without Consensus or Individual Deal Attribution
“So we don't have a consensus driven approach. We actually encourage dissension and we want dissension. We don't have attribution.”
Callaghan: Great VCs target uncharted frontiers, not Rosewood networking
“If you're really, really good at early stage venture, that's where you want to be. You don't want to be at the Rosewood schmoozing with other VCs trying to figure out what they did and what, you know, what you can do to be a, you know, a little copy of that. Y…”
Callaghan: True Ventures bans partners from claiming they are right
“You're not allowed in our partner meeting to say, I'm right about this, or even I think I'm right.”
True Ventures always aims to be the anchor investor
“Our goal at True is always to be the anchor and to have the largest Shareholding in the company at that stage, because we think we're going to be able to impact the DNA of the company in a more profound way and help protect it more effectively.”
Tony Conrad predicts Blue Bottle Coffee will be a hallmark investment
“Blue bottle coffee is a bit of an atypical one for a tech investor to be doing, but it turns out that this is going to be, you know, one of the hallmark companies in our portfolio.”
True Ventures Originated the Founder-Friendly VC Movement in Silicon Valley
“The philosophy was actually, thanks to True given to me because of their philosophy, which was seeking founder-friendly venture capitalists, and that was really kind of their contribution to the ecosystem, was how do we find, how do we be the most founder-frie…”
Schneider: Automattic experience represents only 25% of investment approach
“Even though my automatic experience is probably only a small part of my investment approach today, you know, maybe 25%, the rest is really based on being part of the team at True, and like I said before, we're a very collaborative group, and we're committed to…”
Schneider: True Ventures gets up to two years with early product-focused founders
“I don't really feel like it's that compressed, to be honest. I mean, it does, you know, when a startup takes off, it does move quickly, but I feel like we get involved so early. We actually have a good amount of time on that first year or two when it's just pe…”
True Ventures generates full fund returns from one or two investments
“In each fund, we've shown an ability to partner with one or two founders where our investment in the company over time will end up returning the entire fund. It, Duo Security, HashiCorp, Peloton.”
True Ventures makes initial investment decisions in a non-consensus manner
“At True, decisions are driven by an individual protagonist on the investment team, often with support of one or more others on the team, but are often made in a non-consensus way.”
D'Augelli: The video doorbell market was zero dollars when True backed Ring
“When we invested, the doorbell market was zero dollars.”
D'Augelli: Founders are never surprised when True stops follow-on funding
“I have not yet had an experience where someone was surprised when we said it wasn't working. And often it's a conversation with them where they are aware before we are.”
True Ventures deployed $50M to $60M each into Ring and Peloton
“And so in some of our biggest companies, things like Ring or Peloton or Zymergen, we started with a small check and over time invested 50, sixty million dollars.”
True Ventures has backed 28 founders twice and eight founders thrice
“We've backed 28 people twice. We've backed eight people three times.”
Agarwal: True Ventures targets 20% ownership with $1M–$3M initial checks
“So when we make that one to three million initial check, we target around 20% ownership, and we have a big enough fund, so our latest fund's around three hundred fifty million, and we have an opportunity fund, which is about two hundred eighty million. That's …”
Agarwal: Maximizing risk is the third bullet in True Ventures' LP deck
“Maximizing risk is such a core tenant tenet to what we do. It was the third bullet point on the first page of our investment deck that we've been pitching to LPs”
Callaghan: True Ventures limits initial checks to under 1% of fund
“Our average initial investment is, you know, somewhere between one and three million dollars. We're currently operating out of a three hundred million dollar fund. So our initial check is less than one percent of the fund.”
Callaghan: Industrial robotics is underappreciated and generating real revenue
“I think that there's just incredible automation that's happening and it's backed up by software-based technologies, machine learning, and yeah, a little bit of AI and decision-making, that kind of thing, but in computer vision, but we're seeing a lot of very, …”
True Ventures will never invest in another fitness step-counter startup
“We're never going to go after another fitness counter, a step counter kind of idea. That's old and in the market now.”
Tony Conrad spends disproportionate time analyzing founder motivation
“And I spent probably a disproportionate amount of time, I think maybe more time than any other investor, in digging in on that basic premise for why are they after this?”
Tony Conrad ignores market trends and is not thesis-driven
“I'm not thesis driven at all. I'm not trying to predict where the market is going or where the next great ideas are.”
Schneider: True Ventures holds 75% of its investments outside Silicon Valley
“Right now, I would say about a quarter of our investments are in Silicon Valley, about half are in the rest of the U S US, and then another Quarter or so in the rest of the world, primarily Europe and Africa”
Schneider: True Ventures' three recent major exits were outside Silicon Valley
“If you look at the True Ventures portfolio, we had three very big exits over the last two years. Ring.com to Amazon, Duo Security to Cisco, and most recently, the Peloton IPO. Now, these three companies have one intriguing thing in common. They were all built …”
Schneider balanced VC partner and Automattic CEO roles for eight years
“It was actually eight years of doing both of those jobs.”
True Ventures targets 45 to 50 initial investments per fund
“In each fund, we'll make between 45 and 50 initial investments in reserve really heavily.”
True Ventures makes 65% of its seed investments at company inception
“So when we invest at the seed stage, it tends to be 65% is at or near company inception, some are a little bit later, but it tends to be one to three founders.”
Agarwal: True Ventures makes 45 to 50 investments per fund
“We do about 45 to 50 investments per fund. That tends to be around the right number. It's higher than what you typically see in some of the later stage funds, obviously. But we think, you know, having, it's sort of the right number for us in terms of failure r…”