- Root Ventures | Early Stage – Technical Founders
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- LEE.AF | Personal Page with articles
- Medium Blog | Needs updating
- Enjoys continuing conversations into the bathroom…
I knew that I was going to have a great conversation with Lee Edwards from Root Ventures from the get go. Before we even smashed the record button, he gave me a quick tour of their office right on the Mission in SF. It was cool to see the digs and really gave me a feeling of their culture.
I knew a bit about their culture at Root Ventures, as I knew that all of their partners came from a technical or engineering background. This was novel to me as many of the venture funds out there do not have a lot of technical background or technical know-how. It may sound stereotypical, but to be a venture fund that is filled with Stanford MBAs is, well, the norm.
It was great to get some background on how Root Ventures was formed and how they are all a bunch of hackers: where most would pay a contractor to put things together in an office, these engineers don’t mind getting their hands dirty!
Lee came from a mechanical engineering background, moved into software development and then software development leadership as the previous CTO of Teespring. I could have SWORN that I bought shirts where he was the model for them! No joke!
I loved the fact that Lee was plainspoken about the commoditization of venture funding. I mean, all capital is green at the end of the day. So how does Root Ventures differentiate? In several ways explains Lee: from their technical experience, their selection, and sourcing methods, to their desire to actually be helpful and digging into the code of their investments.
This is an area that many other venture funds can’t compete. They don’t know code! This obviously drives a lot of Root Ventures thesis on technical founders:
“We focus on exclusively technical founders and startups that are driven by technical challenges. A buzzword we use is ‘hard-tech’ as opposed to ‘deep-tech.’ We’re interested in things at the engineering phase and not the science phase. While we follow what’s going on in science, we’re engineers, not scientists.”Lee Edwards – VC Hunting S2E2
I appreciated this focus for their fund. The deep-tech world and startups that are using a lot of science requires a ton of diligence and understanding for what the potential outcomes could be. In my opinion, investing in these types of future-tech startups are a real gamble. Code is code at the end of the day. I’m a little biased towards knowing the output, and I think Lee appreciates it too.
One of the burning questions I had for Lee was around how they balance their technical support of founders and just being helpful. I really appreciated his answer as I know that I can get too stuck in the weeds when I’m helping a technical founder:
“Every VC has this interesting balance where you want to bring experience to bear on your decision making, your sourcing, your involvement with the board, but at the same time not to over-index on what you’ve done and accomplished. Sometimes you’ll hear of this one VC who had this one-big-win and he won’t stop talking about it and he wants us to run our business like that and doesn’t really understand the context shift. We come in with an engineering mindset instead of a finance/MBA mindset or a COO mindset.”Lee Edwards – VC Hunting S2E2
Pivoting a little bit in the conversation, I wanted to know what Lee thought about the state of venture capital as he sees it today. What is interesting is he pointed out that so many venture funds are going the way of Softbank… just getting bigger and bigger and bigger funds (like Sequoia, Founders Fund, Benchmark, etc). I’ve seen this too, and I wonder if there is a bubble some where… have we hit peak venture?
“Raising bigger and bigger funds is nothing new in venture, but there is a kind of weird perverse incentive, because you make your carry and management fee, but mostly the carry on the size of your fund, and so there is this weird incentive where you want the fund to get bigger and bigger… but it can be bad because if you’ve been successful as a seed investor, managing $100M, who’s to say you’d be really good at managing $10B which requires a different strategy.”Lee Edwards – VC Hunting S2E2
So, was Lee Edwards a Teespring model? I believe so!
Moving from being the CTO of Teespring to venture was a very organic experience, similar to mine and most who have gotten into venture over time. Dabbled in angel investing opportunistically, and then finding more and more passion and interest for being a VC:
“Getting into venture was similar to when I moved out of mechanical engineering at iRobot into software, when I realized that I was spending more time writing software at home, I was like: Shouldn’t I just make this my job? So that’s what I did with venture. I was investigating starting a micro-fund and I invested in a company where Root Ventures also invested. Avidan called me in and wanted to know ‘who was this joker’ on the cap table and does he belong here? Eventually he offered me a job.”Lee Edwards – VC Hunting S2E2
Finally I wanted to know how Lee has changed during his first year ever in venture capital. I really wanted to know what his first year experiences were like! Clearly moving from being an angel, to a scout cutting $100K checks, to now leading rounds, has been a growing experience for Lee. He’s learning a ton of negotiation skills and big doses of the true reality of being a venture capitalist and the importance of differentiating oneself.
“As a founder, you might want the venture capitalist like myself who wants to prove themselves. All the twitter accounts that parody VCs around how they can be helpful… but I think that’s actually the right approach! I’m not trying to push myself into their decision making process but I want to be there when a founder is looking for connections to people or be the first phone call when things are tough. I’m intimately familiar with the need for emotional support and professional support for founders. That’s actually one of our KPI’s – how often we’re the first phone call.”Lee Edwards – VC Hunting S2E2
I loved this part of our conversation because it was the meatiest. I’m sure Lee would agree that venture is all about relationships. And how he treats his investments and founders is going to be a big part of his success in the future.
I loved the fact that he could so plainly discuss how Root Ventures differentiates themselves amongst the pack. I look forward to more conversations with some of the other partners in the future!!!
Enjoy my retrospective… and don’t continue that conversation in the bathroom! 😉
LEE EDWARDS SOCIAL MEDIA KIT!
Hey, be safe out there.