Ian Rountree is a millennial, but don't let that create any wrong assumptions. He actually knows what he wants to do and who he wants to be when he 'grows up.' He spent his graduate school money on investing in ideas and people instead of getting an MBA and decided that being in the world of venture is where he'd like to stay... at least until 84 years old. This $100,000 he invested taught him something even greater than getting a diploma:
"I learned the power law of venture capital: Out of the 11 companies I invested in, seven are dead, two are somehow still alive, one is sitting at 4x, and one is sitting at 130x."Ian Rountree - VC Hunting S1E10
Looks like real-world education is beating out the theoretical again... and I won't go into any diatribes of the cost-value-ratio of graduate school, I promise (for now).
Clearly a reader, I was immediately drawn to that side of Ian's personality. I'm a huge reader, I'm highly scientific, and I love big expensive words. Just like Ian! His enumeration of how Cantos (which means verses in Latin) came about is as poetic as the words itself. He loves big epic stories. Ian loves being part of legendary quests. I believe that he believes that each of his investments is an epic story... maybe even if it's one of the many that fail.
"The entrepreneurial journey is the modern day epic tale and we're all drawn to that. We all want to be part of a story bigger than ourselves."Ian Rountree - VC Hunting S1E10
So who is Ian Rountree's hero? His uncle of course! The legend Dick Kramlich is the Chairman and Co-Managing Director of Green Bay Ventures. What an amazing influence that must have been to the early rumblings and interest in venture. I hope we can maybe have him on the show!
"My uncle has always taught that venture capital is about the entrepreneur. You have to stay humble, it's a small community, it's not worth it to make enemies. That's hard for me since I'm a pugnacious millennial. He's always been an inspiration to me and a fantastic investor across many markets."Ian Rountree - VC Hunting S1E10
What I enjoyed about Ian is the fact that a lot of his decisions around how he operates have been well thought out. The idea of being part of a story bleeds through every answer he gave me. When I asked him about how he's going to return venture capital to it's roots, he responded with the fact that many of the club-investments back in the day were very much pre-revenue. They were infrastructure investments rather than applications. These are the types of stories that Ian wants to be a part of.
"I'm doing this not only because I want to be part of these important stories, but I believe the most market value will be created by those companies that take a long term vision and create new inventions... each individual company might look insanely risky, but we're going to have 30 or so in the portfolio so we only need one grand slam or a couple home runs to return multiples."Ian Rountree - VC Hunting S1E10
Ian and Cantos ventures are thesis driven, not thesis defined. Ian believes that things move so fast in technology that you have to be flexible to catch the industry leading companies that only arise every 10 years or so. This allows him to be 'risky' with his investments as opportunities to fundamentally be part of market-changing companies don't come around too often!
One of the ways that Ian can stay abreast to all the movers and shakers is he's created a pretty powerful cohort of 30 investors or so in what he calls "VC 3.0."
This is the modern day venture capital syndicate. I remember reading Brad Feld's Venture Deals book and he discussed the syndicate pretty succinctly: a collection of investors.
Utilizing the power of technology and social, Ian has created a mastermind group of small fund venture capitalists (usually small in check-size) to help fill out deals and help each other find deals. This is the network-effect of venture on full display! I had some concerns around how people in the group don't just 'draft' on other successes, but clearly Ian and his community have created rules to help remove bad actors or bad behavior.
One of them being that if you raise a fund over $50M you get graduated out. Having run and managed communities of thousands of people before... I understand the frustrations of community management at scale!
During my research into Ian Rountree, I kept coming up with this theme of epic adventures or epic stories. I always enjoy having a couple questions that just rise up in my gut to ask (they are mostly random and non-sequitur) ... and the one I came up with Ian was: "Who is the Disney Princess you most align to?" His answer? "Belle and Jasmine. They seek adventure!"
Digging in beyond just Disney princesses, I wanted to understand more about how Cantos Ventures does deals and what they look for in founders and investments:
"I'm told even by our own advisors sometimes that our companies are crazy. Having been investing for 7.5 years now, I've seen that the ones that you think are crazy, end up being the ones that work out the most. You kind of have to lean into that but maintain a rootedness in reality or at least probability and stay humble enough not to skew your own model."Ian Rountree - VC Hunting S1E10
I particularly enjoyed Ian's candor around how early-stage companies are really a guessing game at the highest level (that one can get better at over time and experience within a specific niche):
"In early stage startups you really don't know. You have to be probabilistic and not deterministic. If you're trying to build a model that takes in all the factors around early stage investing, you're going to be wrong because your data is flawed or nonexistent! You don't even know what questions to ask!"Ian Rountree - VC Hunting S1E10
Often early stage companies need two things to survive in Ian's mind:
As a founder myself, I completely agree! At the early stage, in many cases, you don't even have a company yet. Just an idea. This was a perfect transition into my final (real) question to Ian: What does he look for in a founder or entrepreneur:
"I think where we are in technology today, the era of clever opportunists has largely passed. I don't think you can be clever with a CS degree or a newly minted MBA and think, 'Hey, the iPhone came out and let's connect GPS to taxi drivers.' You're not going to build a thirty billion dollar company on that idea today. I think you have to invent the next iPhone or the next GPS. I'm looking for engineer operators or inventor operators."Ian Rountree - VC Hunting S1E10
I love the uniqueness to Ian's thesis. He really is looking for world-changing tech and leaders to take it there. If you're in the wild and crazy space of technology, make sure to find your way over to Cantos.vc. Ian and his cohort might be just the ticket you've been looking for.
Enjoy my retrospective! We go deep!
Listen to me, lad, and I'll teach you everything you'll ever need to know.
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