“Getting warm intros are paramount in the business,” said Brown. “The ability of a founder to make their way to the radar and having the drive to making that happen is a good sign. I’ve also seen founders ask investors who have passed on them for investment to introduce them to other investors. I generally think that that’s something to avoid.”
Brown, formerly with New York financial services firm The Blackstone Group, joined First Round in September of last year and is based out of the company’s Philly office. He spent Tuesday morning chatting with eager startup founders at University City Science Center’s Coffee and Capital event series.
Though he does not refer to himself as a venture capitalist, he does work alongside OG investor Josh Kopelman and the team in evaluating possible deals.
So, it’s fair to ask Brown, what kind of team gets approval from the firm, which, at least in Philadelphia, has a reputation for being a kingmaker?
As usual, serial entrepreneurs and founders with an extensive background working in the field they’re tackling goes a long way. “If there are 20 LinkedIn entries within a specific space, a move to a new space is something that’s worthy of an explanation,” said Brown.
On founding team relations: an established, longterm working relationship with a proven track record of success immediately checks the box. But for family teams, Brown hinted at trouble.
“Let’s just say that family businesses, brother/sister founding teams and the like, can get super interesting later down the line,” he said.
Still, there’s not one specific formula that gets the OK every single time. “It’s about pulling four to five different levers at once.”
But once all initial hurdles have been cleared, disagreement on the economics (valuation of the company, investment size, etc.) is something that, according to the manager, most frequently kills deals on the table.
P.S: Have more questions about venture capital? Head to this fireside chat between Kopelman and Apu Gupta of First Round portfolio company Curalate on May 1 during Philly Tech Week 2017 presented by Comcast.