C2 Ventures Founding Partner, Early-Stage Investors
Chris Cunningham | C2 Ventures Founding Partner, Early-Stage Investors

"Do what you do"

- Chris Cunningham

Chris Cunningham on where the venture / business world is heading

Talk Takeaways

Chris Cunningham, founder of C2 Ventures, reflected on his experience as a founder of multiple companies. He shared his vision for C2 Ventures and his perception on where the venture / business world is heading. He also clarified the common misconceptions on VCs, discussed on the types of mentoring, and dished out practical advices for startups. Chris also shared his investment process and how he likes to build a strong rapport with his founders.

About

Chris is a 20-year media and tech veteran who is a serial entrepreneur turned early-stage venture capitalist. As an angel investor Chris invested in 18 start-ups, four have sold for cash, and others such as Petal, Narrative, Embrace, Advisr, and Bloom Credit continue to increase in shareholder value.

Chris recently launched a $10MM early-stage venture fund to scale the C2V brand and invest in more companies alongside their investors. C2V’s current portfolio includes Kambr, Magallan.ai, Paladin, Beam, Otari Mats, Boostr, Step One Tech, Rens Originals, Somatic, Blu Tag, Copper, Abode, Armilla ai, and Koffie Labs.

Chris was the CEO and Co-founder of appssavvy a company he started from his Soho apartment in 2006. appssavvy was the industry’s first tech platform that monetized Facebook apps and games through native advertising with fortune 500 brand advertisers. He was also part of the growth story at Webs.com which lead to a $117MM acquisition to Vistaprint.

Chris has been named one of the “Most Important People in Mobile Advertising” by Business Insider, as well as being named an Ernst & Young “Entrepreneur of the Year Finalist” two years in a row.

He a limited partner in both Bowery Capital and Tech Stars and recently launched the Super Powers Podcast show.

The full #OPNAskAnAngel talk

JP: Well, Chris, you know what we’ve already got started. So just us having this little interlude into what’s going on in our lives is the perfect segue to jump into our supporters fund, O.P.N. Ask An Angel and we’re super excited to be able to chat with you today, Chris. And the best way for us to start is, if you can give us a little bit about a background on kind of where you’ve come from, what you’ve been up to, and then where you’re going. And then one thing about you that nobody would know.

CC: Oh boy, obviously I would have to say that last one towards the end. So yeah, great to be here. Super excited to chat with you. I’m a 20-year median tech founder and entrepreneur out of New York City. So I built startups, and have had my fair share of successes but also failures. I parlayed those experiences and to be an angel investor for four years under C2 ventures and then roll that into being an early stage venture partner for CTV Fun One, which is a $10 million early stage venture fund out in New York. We’ve made 18 investments backed by 60 awesome LPS. I run a podcast show called Superpowers where we identify and unlock everyone’s unique superpower. So that’s what keeps me very, very busy and enjoying it with the sort of main focus on supporting and helping founders, both through experience, capital, and commercial introductions. Both through me and my partner Matt, but also our collective LP bench. So I guess that addresses what I am doing now is the next part “where am I going next?” What’s-

JP: Yeah, what’s been- Where’s the direction or what are you guys up to?

CC: So phase Two is, so we’ve had a really good fun one based on some an early exit to peloton and for mark ups in the fund, even though we’re just two years old, we launched in 2019. We, now, Jeff, turn our attention to fund two, which will be, you know, about a four or five x somewhere between $40 and $50 million fund, still geographic location, the same larger checks taking board seats. So we spent a lot, a lot of our time, both with the founder community as well as investors. You would know I have a tattoo of a bulldog holding, it’s meant to be able to cross stick, but it looks like a tennis racket, so there you go.

JP: Nice! That’s, that’s something that I guess you wouldn’t know. That’s good. I like that. Very cool. So maybe we can go back a little bit to your past. What did you find that really brings a lot of value to the companies that you invest in? Your past may have helped bring that forward. So in your past startup experience, what thing did you really find it really made you successful? Was it the numbers, was it the team, was it the operations? And then you utilize that is kind of your keystone, moving forward with these companies that you work with.

CC: So number one is again, as I mentioned, I’ve been a founder a few times. I ran a company called Apps Savvy at in New York, which kind of pioneered the idea of monetizing Facebook apps back in 0708 before smartphones. You know, I, being a founder I think allows sort of a trust and sort of the door to be opened between future founders or current founders because you’ve been there, done that, and I’m also a people person. So I have Matt as my numbers guy, operational guy, where I think I’ve kind of learned sort of the right or respect in the founder community is. I’ve been there, I understand kind of their path and journey and how challenging it is based on my background and my experiences. I have also proven through my angel portfolio that founders really do appreciate the support and knowing where the bodies are buried and really being in the trenches, which happens to be C2V’s tagline.

So those are, you know, one, once you sort of earn that, Jeff, and you do what you say you’re gonna do, which a lot of people don’t do. Whether it’s helped them raise money or drive revenue. And you’re kind of on top, you know, constant text with them, then that just opens up a reputational reference piece, which has kind of snowball positively for us so far touched woods. So, you know, I think it’s a good eye on the people’s side. I’ve always been good at that. There’s a lot of things I suck at, but I’m fairly good at sort of the identifying good people and working with people, but also, based on our core thesis and verticals that we invest in, understanding after, you know, six years, what are kind of the core components that we look for to hopefully identify founders and startups that are working on really big problems that can create great outcomes?

JP: So when you’re going through these six things again, does it relate back to what you started? Did you have that same type of mentoring and advice when you are starting your company?

CC: No, no, it’s actually just the opposite. Hence the idea. Like, I think all great ideas are born out of past frustrations and pain, that’s just one man’s opinion. But no, you know, through my experience I had had a bad board member, we had an exit opportunity to a publicly traded company. Now we had a failed exit here, we had all these different things and when I looked back and kind of kick the dust off, I’m like, “Man, where were those sort of people that I probably needed as a late twenties, you know, second time founder who thought he knew it all, but did not know at all?” You know, had not been humbled yet, and had not appreciated that failure is actually a really good thing, even though at the time that it happens it’s very hard to swallow that, accept it and actually say it out loud, I think as you get older you kind of appreciate those things.

So no Jeff, I came at a polar opposite, you know, most people come at things like I crushed it. Here is my, you know, here’s who I exited to and here’s my numbers or my- I can get more from like, man, I’ve been there, done that and I can make sure that you don’t make the same mistakes I made. So I came at it from a kind of a more realistic, humble approach, which has served me well.

JP: And you find that with the companies that are working with that they’re taking to that kind of advice and I guess driven problem-solving that you’re bringing, which is have been there, let’s take a second and take a step back and re-focus on how you’re running your business or how you’re engaging with people and using that as kind of that forward momentum to build trust?

CC: Yeah, I mean, you know, look to be clear the founder, it’s their company, it’s not our company were investors, we have a share, we’re motivated for them to do well, but we don’t ask, we don’t run companies. It’s like any natural relationship that you have, that you’ve had for years or decades or whatnot, which is number one, if you believe in a founder early, when a lot of people pass, that develops trust. You write a check, now you’re at a whole other level. Now you sort of commit to doing things, which I think a lot of firms fall short on, for whatever reason, then you really sort of cement you’re kind of rapport, which again I have with the majority of our portfolio founders. So that’s generally kind of the sequence of the path of building the trust and as you do that, it allows you to get a better perspective and position on how the company is actually doing.

So just said another way, you know, if you google this startup failure rate, like it’s 85%, it’s insane. But when you look at the numbers at early stage, the mistakes are being repeated, meaning the same mistakes are being made over and over. And our thesis is that that’s because best practices aren’t being shared in a thoughtful way. Everyone’s too busy. Quarterly board meetings happen, obviously quarterly, every three months. So how do we close that gap? And if you develop trust through the things already outlined, then you’re going to get greater visibility. “Hey, by the way, I’m having a hard time with my co-founder”, “Hey, by the way, we just raised three million bucks. Should I get office space?”, “Hey, how do I hire this or should I grow too quick or my board member things I-?” Those are all sort of questions and output that we have seen and heard before that we could offer our advice to. Now whether they decide to take that advice is up to them, but we generally find that it really helps the founder mission.

JP: So it kind of in a way, makes me think that because you have a structured way on how you want to enable your founders, do you kind of find that the companies, if you look at all the ones the 18 that you’ve invested in, that the founders all have very strong similarities to what you’re really refining as these people like what we’re saying, they like what we’re talking about, you know what they were looking about office space, they decided not to because they didn’t think they’re the right size? They agreed. So they didn’t do it, but they all kind of have that same molding that you’re looking for to being a big company. So you kind of talked to them, coach them through, they’re really coachable and there’s some real excitement behind that and they’re really, taking in the right insights that you guys are providing?

CC: Yeah, I mean, look all over our website or credentials and part of our pitch when you’re, when we’re getting to know them through a zoom that’s on the table.

If you’re founder and you’re like, “Man, I don’t like the sound of this, then we’re not a good fit,” but I think through the dating process, which is multiple calls and diligence and then we do references. Like Jeff, this isn’t, I did four years of hard core angel investment, you know, 18 companies deployed over half a million and a lot of great companies returned my own capital, yada yada. But this is a lot different through an early stage venture fund because, you know, we’re an institutional fund, we’re backed by some massive names and family offices. So through that experience, through that diligence process, it’s determined whether we’re good fits or not, right? And to be clear, we don’t want to, we don’t have the bandwidth or can it scale to run a company. But certainly if the founder was like, “I got no interest in talking to my investors”, not that anyone really says that directly, we’re probably not really a good fit. And luckily through the last kind of four years, it’s all very organic. Like all good products I think are sort of built is people talking to people, founders tell founders, “Hey, C2V invested. They did exactly what they said they were gonna do. They stay out of my way, but they’re helpful and you know,” and now it’s all word of mouth when I see inbounds, it’s always some sort of email chain of like, “Hey, does anyone know?” And then, you know, so again, the founder community is small. If you screw up, you’re in big trouble as relates to being a VC. But if you do what you say you’re gonna do, it can be extremely helpful as relates to deal flow. And at the end of a deal flow, quality, deal flow is probably one of the most important sort of selling points of any venture firm.

JP: You touched on a previous point, which is structured around building a solid rapport with your founders. How did you go about doing that? And what is the win like you said you had a couple of exits before, is that what you utilize this kind of your propelling way to say, “Hey, we’ve got some good advice here,” or what did you have to do in order to build your rapport to get your startups in line? And the reason I ask this question isn’t so much for proving what you guys are doing, but kind of helping the startup look like, “Hey, I gotta build rapport with a VC. And I got to build this up so that I can have these guys have my back.”

CC: Yeah. I mean the good ones do their research and they find out on their own. The other ones that are kind of introduced somewhere that get to know you, they hear your story. Again, my partner Matt is a polar opposite, different swim lane, wall street, hedge fund, certified CFA. He’s a really obvious operator. So we have complementary skill sets. When you look at our investor base to Jeff, which is very unique about us, is most venture firms are very happy to take your check and to make you money but stay out of our way that you’re called an LP. A. Limited partner, right? We’re just the opposite. We’re kind of more, we are investors, meet our founders, they.. Matt and I don’t pretend to be the smartest guys in the room. So if we don’t know machine learning AI or data really well. We have other guys or gals that are LPs that do. My point is as we go through our sort of our thesis and who we are and why we are and where we come from and all that, then sort of the dots are somewhat connected to say, “Okay, wow! You got those three people that run Spotify’s engineering group or worked at Google”, or “Oh wow, I can get access to them?” So listen at the early stages, it’s like, I don’t know if you have kids, but it’s like it’s kind of that same sort of example where those critical years of development, you know, that’s where most companies, if you can get past a pre-see- angel, friends and family pre-seed seed, right? Which is where we play to your series A is generally 3 to 5 million, 2 to 4 million. It’s generally three year three or four. Again, Jeff you can, you can move these things around a little bit, but that’s, if you can get to that stage, you are, you have certainly not, you’re not in the home stretch and you can still run out of money and things that go sideways look at we work. Or maybe you run an unprofitable company Casper mattress, but you’ve gotten through a very critical piece.

So one thing I didn’t mention regards to kind of who we are is that is our focus. We are not a middle stage or a late stage venture firm. When you can get to your series A and you can hire an executive team. What we say voluntary is like, “Listen, we’re still here for you, we’re going to be frie-”, but you kind of almost outgrown what we’re good at, meaning we’re really laser focused on a specific part of the timeline, which is clear to the founder and what we’re good at. And I, honestly think Jeff sometimes it’s good to say what you suck at. Like I’m not a great scale guy. I can’t take your company from 20 people to a 100 or 200. Never done it. But, I can tell you everything you want to know to some extent with our LPs about years, 0 to 3, if that does that make sense?

JP: 100%. And that’s valuable knowledge, right? Being able to as an operator, be able to take a company three years, 10 years, but being able to take it that three years and get them from 0 to 20 people, which is crucial and turn them into a real business outside of Alpha and Beta and M. V. P. Now you’ve got them into something structured and you can help them get to that series A. Man, there’s companies out there, lots of VC firms that want to just jump in on series A companies that are at that stage, right? And if you’re helping them get there, that’s huge.

CC: That’s exactly right. That’s exactly right, yep.

JP: So there was another comment you made it, I want to kind of explore too, because I think it’s just as crucial as the phase you guys are coming in, what you said, ‘do what you say’. and I think that, that to me is really crucial. Why- when you mentioned, why do you think that carries any weight? And what’s the value behind that?

CC: Because we all have had those meetings and calls for its like, ”Yeah, I’ll follow up. I’ll connect you. Yeah, I’ll get back to you next week.” Again, Jeff, you tell me if you’ve had a different experience, but I think, you know, whatever that, that percentage is 70% where they generally don’t sort of formulate and people, you know, don’t sort of fall through. So if you have a call with the founder as you’re in the diligence process, if you can be helpful or value add before you write a check, they notice, right? It’s a, it’s a, it’s listen, this isn’t rocket science and I can’t pretend that I’ve uncovered something genius. It’s called execution. And I also, you know, it’s not glamorous. It’s not a ton of fun, but it’s what’s required to both allow yourself the opportunity to partner with the founder and to build trust. In particular, in an environment now where everything is done through zoom, right? And there’s less sort of coffee meetings and things like that with the pandemic. So execution and follow through is critical. I would advise us to anybody doing any line of work in any vertical. Again, I’m stating something very obvious like duh, but you’d be surprised with the actual follow through of it. And I’m also not committed to things that you can’t do. That combined with dry powder combined with a, you know, a thoughtful and smart investor base. You know, and look at the end of day, you know, you want to work with people that you like and trust and that are fun and enjoyable. Life is short. So hopefully we can articulate or express our kind of, our true selves, through the process. And hopefully other people would also say, “Hey, these guys are awesome to work with”, which, as you know, you know, those kinds of references are, are gold.

JP: Well, they carry a long way and when it comes to execution, I think, you know, you really define it that it’s all about, closing the loop, it’s executing. It’s showing that, showing the investor side that you can go all the way in something you’re gonna say you’re going to do. If you’re going to make an introduction, or you’re going to send over a business plan, or financials or something. It carries a lot of value when you send it on time or in that same timeframe. And it’s almost in a way addictive because if you find a founder that’s very.. meets the requirements are looking for, it’s hard for you not to want to keep working with them and want to make an investment.

CC: That’s right.

JP: You’re like, oh my God, they sent me this whole deep dive folder and it’s all ready to go. This is incredible. And they were a day early. So you kind of get really focused attention to that, which pulls you away from everything else you’re working on because they’re really hitting that criteria for you.

CC: That’s right, yeah, absolutely. So yeah, look, you do that enough times and you begin to build somewhat of a flywheel or called a snowball. And I think if you ask me, you know what keeps me up for the challenge as relates to where we are now and our second fun, it’s going to be the ability to scale what’s working, right?

You know, anything sort of smaller you could argue is easier to do because it’s smaller. So how do we scale as we write more checks, bigger checks and that the answer is we lean continue to lean more on our investor community, the people that have written checks and our fund. Again, the idea, the objective is to make a return. It’s called venture capital, right? But it’s also to be heavily involved and active, not for everybody, but from the majority of them.

JP: No, that’s great. Is there any kind of pieces of advice you give to a startup that would say, “you know what if you’re gonna interact with us, you know, come”, I don’t know, guns loaded or what is the kind of thing that you guys look for that really benefits you to move forward?

CC: Yeah, I mean, one piece of advice is you never want to go talk to an investor. Two things one, know your audience and do the research, and don’t come in blind, and it takes time, you know, could take five minutes, could take 20. But that’s an important thing. You know, we see 15 company pictures a week. We can tell who’s done the diligence. Trying to get in through a referral or reference. Can’t ask some young founder to have a massive network, but if you can try to work that through or connect the dots, that helps. I think the main thing though is show some grind, show some sweat, don’t come at us with your literally starting day one with an idea that you haven’t raised friends and family, that you haven’t sort of unloaded your bank account or you’ve got into. I don’t want people to go into financial debt, but we want to see that you’ve attempted or you’ve built some sort of trajectory before you come to a early stage venture firm because listen, this shit is hard and no one should do it unless you know they’re willing to kind of run through a burning building because it is brutally difficult. You’ve got every headwind. Number two like, and then on top of that, ask yourself why you’re doing it. Do you just want to tick the box to be an entrepreneur founder? Terrible strategy. Third, I mentioned just the earlier Jeff is, I do think, you know, a lot of people are like, I want to start ideas just because it sounds cool or my buddy thought that was cool or this solves a problem for me. That’s not enough either. Like, really ideally you lived in some sort of experience, you worked in a company or like, “Oh my God, like this is a massive problem.” It’s so obvious and you, and you have to start it, then go through friends and family and angels and get a customer, get a logo and get to know the VC. And then ask, do not come to an investor without showing some real sweat equity. Bad boot.

JP: It makes a big difference for sure, Especially when you’re going into a, we’ll call it later stage, when you’re going into a VC or later than all of the other groupings. You know, they want to see some metrics, they want to see some value and hustle that you put into it.

CC: Yeah.

JP: I love the concept though, of showed some grind because a lot of the times and I’ve heard stories all the time. They’ll say, “I’ll meet you at six a.m. down at the corner of coffee shop,” or ”Let’s have a call at six.” And people thinking, why are we talking at six in the damn morning? And it’s more like, I want to see how dedicated you are to actually making this happen and push them to that limit because there is, I think there’s a desire to want to invest in everybody. Every idea is great, but when it comes down to it is who is really going to be able to be standing here in five years with that’s grown a great company? It’s gonna be the ones that put the hustle in every minute of every day to make that happen.

CC: Yeah. Listen, I don’t really have too much to add to that. I mean, that’s right. I would also, it kind of takes me on another kind of path here, but hopefully helpful to listeners beyond being available. You’ll be surprised with the response time and speed on a weekend or on a Sunday, you know, or on a holiday now, maybe not a holiday, but let’s say it’s a Saturday Sunday. Now, most people argue like, “Oh, that’s personal time to be offensive or whatnot.” It’s actually the best time to get in front of someone because they don’t have that same sort of, you know, kind of email flow or whatnot. So I know I’m kind of taking this a different direction, but I would be very, I’d be creative and sort of think out of the box as relates to the best time to reach out or email. You’ll get emails from the CEOs of publicly traded companies on a Sunday afternoon. Trust me.

JP: Well you’re doing it. It’s like anything. You’re hustling, you’re trying to find the best way to communicate with people. So, like anything, if I want to get an investors attention, I’ve got to do what it takes and I want them to see that I’m willing to do what it takes to make that happen as well. I’ve had people called me Saturday morning at whatever time it was and try to connect and just start pitching.

CC: Exactly.

JP: Yeah, and you’re just in your mind, you’re thinking this is crazy. But then on the other side of your, like, this is amazing because it’s the same thing I would do if I was trying to go get a job or something. I would do whatever angle I have to work in order to move that forward.

CC: Right. Yeah, no, that’s exactly right. Yeah, so, and then Jeff again, I hope you don’t mind sort of just some of the thoughts as they, as they’re coming very well.

JP: Yeah, fire away.

CC: But, you know, I think developing a rapport and creating kind of a steady communication is wise. So if you’re a startup and you meet me, “Hey, Chris I’m not pitching. You just want to let you know that me and my co-founder Jeff for building this thing. We saw you did the X and I want to be on your radar. Do you mind if we add you to your monthly, newsletter or quarterly?” Of course I’m not going to say no, I’m not a jerk, right? Now, you kind of built this relationship and you’re doing it consistently. They see your name, you send it the first of every month. Not ad hoc, not random, not out of sight, out of mind, like a consistent thing. So there’s a way to also develop, I know we’re kind of going down a track of raising capital, but I think that’s every, you know, most people’s challenge is how can you get to know somebody in a way of not pitching them? So I could reach out to you, Jeff and say, “Hey, I want to tell you what I’m doing, but not at not making ask”, which almost has some sometimes reverse psychology to be like, “Wait a second. Why are you- Are you gonna ask me to invest in this? Because this looks pretty cool,” right? So, I think that’s something to, to, to kind of, to kind of think about as a tool. Because look in three of our companies, one of them we watch for 10 months. One of them was six months. I know the founder probably didn’t believe us at the time. That were like, “No, no, no. We generally want to track. You’re too early, but let us follow your progress.” And I know that sounds like bullshit at the time, but again, for us, it’s true. So that’s another just little hack. Let’s call it a relationship fundraising hack.

JP:Yep. And you’re right. It’s the, it’s a little, it’s like a drip campaign.

CC: Yeah.

JP: You’re trying to keep them seeing your name and understanding the value. It’s like clicking on your link in every couple of months, eventually going to think, you know me, and then you’re gonna add me on when I go and add you a few months later, because you feel compelled to want to engage with me, because you’re trying to understand what that need is, and then there’s a good value opportunity that comes across both sides.

CC: That’s exactly right. Exactly. They’re always a little kind of ways to doing it not. You know, basically, if you’ve seen it done to you and you some sort of spam email or you could tell it was like cut and pasted and the format is terrible, or they didn’t then how do you think someone else is going to respond to it? And, you know, yeah, everyone’s always trying to save time, but probably not the best, probably not the best way to save time when you’re trying to raise, build a relationship or try to get on someone’s radar.

JP: For sure. So it’s kind of interesting like, you know, taking your background with all the things that you’ve done in the startup community and now working on this investor side and just different ways to engage. The biggest subject it always comes across and it’s the biggest feared thing is failure. And as you mentioned in your background, you’ve had winds and fails and all this good stuff. How do you work with the fail side of the business? Is it something that you kind of tuck away and pretend it wasn’t there because you want to glorify the winds?

Or is there a way that says, “You know what? Cut the ties quick failed the company. But here’s a great new direction you should go in.” Did you look at that type of stuff?

CC: Well, the way I was addressing the failed, sort of comment is, I- in my late 20’s, early 30s, again more, you know, overconfident, that’s why you invest in those kinds of people. They gotta be sure of themselves. And I think that’s basically the mantra of most founders, but it’s hard to admit when you’re wrong. I think that comes with age and some gray hairs and being comfortable with your identity and all that. But I think that’s literally that comes with time. I don’t think that’s- so when I had some serious bumps in my kind of founder experience, I didn’t know if I wanted to talk about it or I’d be totally truthful with what exactly went down because I was worried what people thought. Anyway, that I truly believe and know that without those experiences, I wouldn’t be here. I wouldn’t have a, you know, venture fund, I wouldn’t all these, I just know it. So my point is, that was for kind of building the relationship with founders as they got to know me and C2 Ventures, but generally speaking. So that’s kind of my background. Your question, we, because of our model, we stay really close with our founders. So in theory, we’re going to avoid more mistakes because we’re close with the founder, right? And we are okay with this. Let’s use baseball analogy, Jeff, is you know, a single or double or triple meaning a “okay” return or your money back is a hell of a lot better than it being a zero. Now, a lot of firms would not admit that or say that because everyone’s unicorn hunting, which I think is nonsense. Of course everyone wants a billion dollar outcomes, not reality. Only and it’s very, very worst case and you’ve tried everything. Is it time to sort of say, “Okay, this wasn’t working,” and any more time we put on this is probably a bad use of everyone’s time.

I think most firms jumped to that much earlier. We try, you know, think about your relationships, think about your lawn care, think about any maintenance. If you ignore it, your wife, your spouse, it’s not, you’re gonna drift. So same theory, stay as close as possible, identify where those pain points are. You build trust and then you can hopefully guide them the right way. Yeah, so that I kind of answer that both from how I position my story as my bio to build trust. Listen, when people come out and they’re like, “Oh man, I fucked up that, you know, fucked up here, I failed here,” or you close so much more sort of a connection with that individual versus coming in, like, you know, I’ve crushed it, and again, I’m being very wide range here, I think you get the idea, so yeah.

JP: Oh agreed. And I think, well, like you said in time you build humility, but people want to learn that people have gone through those mistakes, or people have figured out how to get around them. And I would think in most part, most founders want to avoid getting into that mistake and failing their company.

So being able to have you guys really driven into supporting them, I think is helpful. Now, you made another comment earlier, which I think kind of will detail out the whole direction of this entire call, which is when a company is working with venture firms, there’s this mentality or this somewhere out in the ether that someone created this question that said, “Don’t go to venture capitalists because they’re going to take over and run your company.” And you kind of mentioned it. “Whoa whoa, that’s not really what we’re here to do, we’re to support you. You’re the founder, we want to help you grow the company.” Can you give us a little bit more understanding of why that people think this, what’s the reason for it?

CC: You know, it’s crazy, first of all. I think it’s like I’d refer to like, what works for media headlines. Listen Jeff, are there examples where this happens, we’re changing control or bad founders and boards takeover? Sure. I’d say it’s like 1% to 3%. It’s the tiniest sliver, but that’s headlines. That’s what business inside or others who are loved by the way are forbes, they write about. Genuinely at the earliest stages or series A that’s not really happening, right? Because the founders own most of the shares, collectively, they have the voting rights. I think where you start seeing this sort of, maybe where it becomes a little bit more potentially toxic or challenging is when you’re like, when, you know, when everyone knows it’s gonna be a billion, multi billion dollar company of Facebook or Twitter or an Uber, we, you know, and now it’s like, forget the relationship, you know, sharp elbows, we’re gonna, there’s hundreds of millions or billions of dollars at stake, let’s get rid of that founder. Let’s move. Generally, those things happen if it’s not being run the right way, right? If the company is not being run well if they’re not performing, but they-

JP: Collective manner you mean.

CC: What’s that?

JP: In a collective manner? Like the grouping of people don’t believe that this is being operated in the right.

CC: Or yeah, if you have multiple board members saying, “Hey, you got to fire this guy or this gal”, you’ve really, I mean, that’s a big, this isn’t like, you know, maybe beat showed up late to a media. This is like you stole from the company or you misrepresented numbers, like very rare. But does it happen? Sure. You know, so this idea that VCs want to take control and all that is, it’s crazy. I- the all the ones that I know, look, there’s always exceptions and outliers. Okay? But they don’t want to run your company. They don’t have the time. They want to pick great founders to run their own company.

They want to make good returns and be helpful. But you know, they very, very rarely happen in sort of the first five years or kind of anything early stage. I think European, I’ve talked to Europeans and Nordics and they really have this sort of notion that VCs come in and take control. All these docks today, there’s like three major law firms say, out of New York City, they all have the same, it’s all very vanilla. You know, of what, what VCs get and what they expect, but none of them are to like run companies and push people around. It’s, no. (Laughs)

JP: No, it’s good. We have to break that down because I think a lot of people really think that that’s the case and then there’s this fear. It’s the same fear of you shouldn’t take angel investing or you shouldn’t take investing in period. Somewhere, someone created a storyline and just kept pushing it that you don’t need financing and then they’ll talk to some DCs of like, “I don’t take money”, and you’re like, “Well, there is a reason for when you take money and there’s a position for taking financing and growing your company and finances.” What’s gonna drive that? Maybe you can throw in a couple of recommendations on when you think is the right time for investment. As you just demystified that people don’t have to worry too much about a VC decided take over.

CC: Well, first of all, an angel around. I mean, look, there’s price rounds, Jeff and there’s convertible notes when you, you know, that’s kind of the most classic form of or tool, if you will, it’s investors getting a discount on their money and it converts with a discount once that round, has is associated with the price around, which is, hey, it’s valued at 10 or 14 by an outside investor. I’m just making up those numbers, but you get the idea. There is, again, from an angel seed level. Mm, the founders run the company, they have control, they can essentially do what they want. The investors are putting their money and based on, you know, there are potential upside, but I hope I’m not demystifying anything. It’s just not the case at all. What was your other question though?

JP: Well, just around the investment side, like people are afraid don’t take money when to take money. Is there any recommendation on when you think it’s the right growth period that businesses should look to raise funds. You’ve got to raise money in conjunction to what your plan says you should be doing. So, you know, if you raise a half a million dollars in angel or seed because you need to get higher three people and get your M. V. P. Your minimal viable product out. So that’s great. Then you go to a C2V to raise, you know, another million and a half with some other investors and that gets you another two years of runway and so you should do it very much in conjunction to what your company is looking to do and the number that you asked for should be very, very dialed in to what it is that you’re going to spend on. It can’t be random. It has to be very thoughtful. Maybe not to the penny, but pretty darn close. So the ideal scenario is you raise based on sort of stages, right? By taking $800,000 from friends and family. I’m able to do x. I executed. Now I raised two million to do y and I’m gonna raise three million a do z, but you don’t even get Y and Z unless you execute on X. Does that make sense?

JP: Yep.

CC: So, you know, there should be a very kind of lockstep relationship between you’re asking what you’re meant to accomplish with that- with those funds.

JP: Okay. I love it. Well, I think you’ve kind of taken us on a really good journey. I think there’s a lot of insights or a ton of insights there on how and what investors or startup should look for when they’re putting dollars into a company. What they should do in terms of when to raise and even all the way to the back to how to manage with rapport and how to communicate and build that company.

So one question that before we get into the rapid fire questions, I want to ask is that through the time that you’ve been investing, the time we’ve been working with investors, LPs and startups, is there a real heartfelt story of what it took to be an entrepreneur that really blew your mind away? It’s a story that you can share about one of the companies that, you felt like, “Wow, these guys really made it.”

CC: I mean just one quick one. I won’t mention her name, but it was a, basically a journey of constant passes from investors not taking meetings, being flown out to be on that show that Gary V was going to be on like, Planet, that Apple was going to run on television To find out that they changed their mind and then they were going to have her on and then she had like $75 and like I wasn’t too sure how she was going to like spend the night in L.A. Like real stories and that maybe the extreme. But those are the kinds of sacrifices that I mentioned earlier that I think are important. So, you know, it could have been a third year trucking coming from a third generation trucking family, we just announced a company, investment, a company called Coffee Labs. But again, years of sort of understanding how complex a problem is. So there’s always some kind of unique, like “Wow, like how did you get there?” But I would say the story, her name is Susan, but the story around her and what she had to go through like again, you know, blood sweat and tears like you kind of expect to hear those stories, you lost your job, you had to borrow. You know, again sacrifice.

JP: What was the outcome?

CC: Raised a series A, grew, you know, going through kind of a different way of challenges with the pandemic because their business is connected to travel, which obviously is tough vertical to be in with the pandemic, but certainly for two years before the pandemic. Very nice growth. So yeah.

JP: Awesome. Well you want to make sure it’s- it has a good ending or it’s going to make a good ending in time. So that’s brilliant.

CC: Yeah.

JP: Thank you for sharing.

CC: No problem.

JP: Okay, we’re gonna jump into the rapid fire questions. All right. First question, what got you started in investing in startups?

CC: So 16 years as a median founder executive, I knew I wanted to shift into venture and work with start ups, but I had to build a portfolio to kind of pivot from being a founder ceo to investor.

So, yeah, that was basically spending my own money, taking my own risk, learning independently for about three or four years, starting back as 2014 when C2 ventures started. So that was kind of my transition for people know me as an ad tech media guy in New York to to an investor. And again, it took years to kind of make that shift. Investing in two companies doesn’t do it.

JP: That’s awesome. Very similar. Just always working with startups, always doing things, but you’re still doing your own thing and you got to make an image.

CC: Yeah, I’ve been a startup founder for, you know, I’ve been in tech and online and media for 16 years, so, like, I’ve never been Wall Street. I’ve never- I’ve only done that. The next shift was like, “Okay, maybe actually start investing in them.” “All right, How did you do there? And did they get you involved in?” You know, “Did they like you?” And that was the next sort of portfolio. And before the fund, my point is you, the traction and timeline into that path is critical.

JP: So you can repurpose your image and you can change your destiny by putting the time into it and planning it and being strategic about where you’re trying to go and put it that in place and moving forward.

CC: Sure, absolutely.

JP: I love it. What’s your favorite part of investing?

CC: The founders. We’re just getting to know the founders, building the relationships with them and, you know, they become friends and you get to know their partners and you have dinner with them. And it’s, you know, it’s like modern day, it sounds cheesy, but it’s like, you know, that Tom Cruise, Jerry Maguire relationship with athletes. Like it’s a real thing. That’s definitely the best part.

JP: Awesome. Well, you did say that you’re the people person of the business. So I’m kind of guessing that the other side, your partner may have a different perspective on that, then?

CC: He’s, you know, I’m with the investors and the kind of C2V marketing machine and the founder relationship. He can do those things. But I think, you know, everyone kind of recognizes that you can only be good at a few things.

You can’t be great at everything. He’s definitely an operations. He’s the CFO, he’s a COO. He’s a behind the scenes guy, he’s the offensive lineman. If you want to go football analogy, you got to have all those pieces. Critical to have the complementary partner. I thought when I started this before I met Matt that I needed another person like me. And thank God I was wrong with that. He’s a polar opposite. Yeah. In a good way.

JP: Brilliant. How many companies do you invest in per year?

CC: About 8- between 8 and 10.

JP: Brilliant, way above the normals. That’s awesome.

CC: Yeah, 8 to 10.

JP: Any verticals you like to focus on?

CC: We love the boring shit. Like we have some, we have, we’re invested in one of the fastest growing CBD companies in the country called Beam back by like, you know, famous athletes and baker Mayfield Danica Patrick. But where Matt and I’ve gravitated our interest, is looking at legacy industries and verticals from bathroom cleaning to construction, trucking, insurance, data that helps airlines price their flights. So, you know, legacy- industries that have billions of dollars to spend in market share, but have no automation or innovation or lack of software. And they’re right for disruption. So when I said boring, I meant, it’s not clubhouse, it’s not a shiny new toy. It’s a something that’s big and real, but we know the money is there, right? You don’t dispute that. What’s disputable or questionable is are they? How archaic is their process is their systems? Can it be, can it be disrupted?

JP: I like it. Try true businesses, they’ve been their legacy, but they need some disruption.

CC: Yes.

JP: Do you have any due diligence requirements that you look for before making a commitment? So anything around-

CC: People, the founders, since we invest early, you know, that’s 70%-75%, So ideally some reference points. Hopefully I would have known them through some other kind of connection, not mandatory, but we’d like that technical co-founder, we’re not going to invest in anything that doesn’t have some really core kind of engineering at the early stages because today in tech, if you don’t have some sort of IP probably not going to be that successful and tougher to tougher to hire that in later. And then obviously it’s gotta hit our thesis. So we see a lot of deals that are like, “Hey, this is cool, I’d invest in this at a personal level.” Not that I do anymore, but in theory, but it has to fit our thesis. We really try to stay disciplined.

JP: I like it. Discipline number one.

CC: Yeah.

JP: Do you lead rounds?

CC: So we- with fund one, we’re not technically set up to lead, even though we’ve led one that’s public and we’re going to lead another one. That’s really the focus of fund 2, which is to always lead ideally always lead with bigger checks. So right now with our first fund, which is, you know, just sub 10 million, it’s more, we will kind of follow you know, with a kind of a 200 or 250K check and then we reserve half the fund for follow on investment as that company kind of approaches a series A but that’s fund one with fund two, Jeff, yes, will be leading more.

JP: Awesome. Do you have preferred terms that you like to invest on? If it’s prep shares, common shares, safes.

CC: Stan- I’ll just leave it at standard economics that are fair for all parties.

JP: Okay. Do you do follow on investments?

CC: We do. I mentioned half of our fund is reserved for follow on, yep.

JP: Okay.

CC: So once we write that initial tickets up check, we’ll track you and as, so long as you’re doing what you said you were going to do and an outside investor comes in to lead. We’re obviously going to participate in leverage our pro rata in some cases we may put more in.

JP: Okay, awesome. You take board seats?

CC: We do.

JP: Okay. And last question is, do you guys do anything outside of the money side of it? You mentioned building relations, but are there other things that you do to help support the companies?

CC: Introductions, fundraising, revenue, hiring, sort of chit-chatting about past experiences. So like a really tried into relationships. All those things.

JP: I love it, awesome. Super helpful. And always good for the startups, to have that mentoring, coaching, and support while they grow.

CC: Yes.

JP: Brilliant. Well, we’re getting pretty close to the end. I think we’ve learned a ton and now we’ve got just three personal questions that we like to ask. Question one, What’s Your Favorite Sports Team?

CC: So I’m from Boston so you can, you can do the math behind that one. I’ll go with the Patriots. You know, I grew up watching them both in the bad times, which no one wants to remember and our good times and obviously in a rebuilding, but the pats.

JP: So the good times that now have gone to the mediocre times?

CC: The amazing times that are now in the good to okay rebuilding times. Yes.

JP: All right, fair enough. You got to rebuild at some point. Right?

CC: Correct, correct. Yeah, we’re definitely there now.

JP: Awesome. Favorite movie and what character would you play in the movie?

CC: Ah man. Let’s go with, I don’t know. Let’s go with Shawshank as far as the movie, I mean, probably Morgan Freeman with his kind of tenacity and grind that he had to kind of go through And I don’t even know if I’m gonna I’m gonna kind of bus the character piece, but that’s definitely a top movie in mind. I should have probably given you some Chevy Chase comedy. Yeah, let’s go with that. Let’s go let’s go with like Lampoons and just because he’s just a nutty, crazy dad. That’s my new answer.

JP: Alright. Actually they’re both good. I think there was someone else in the mix that did Shashank but I don’t know if they picked Morgan Freeman but it was in the top movies, Lampoons hasn’t come up yet. So that one’s a good one.

CC: That’s that we’re gonna stick with that.

JP: Or I think what was the one with came up with was with Chevy Chase and it was, oh my God, he was wearing the Laker’s outfit. In the show, he had the bigwig, skateboard

CC: Yes. That too. (Laughs)

JP: That one was classic. I watched that one not too long ago but that one came up but I can’t think of why I don’t know the name but I can see the video of the VHS video cover with him on it with his ID on the front. It was like an undercover-

CC: No, I know what you’re talking about. I’m terrible with the remembering like my partner would be ashamed right now because he was like pop culture off the cuff. You know, unlike the worst when it comes to that.

JP: Yeah. Well those are, those are good, those are good flicks. I’m gonna have to watch the Shawshank one, it’s been a while, but I do appreciate it. I think it, like you said with Lampoons and Chevy Chase, it brings a lot to the character definition, which it brings out to a lot of the type of way that you think are the way you act or the way you drive things and they’re both great because Morgan Freeman was the guy that got things done and found ways to make it happen. So-

CC: Got stuff done.

JP: -chased to the same thing. So they’re great characters, so-

CC: Yes.

JP: But Chris, it was a pleasure speaking with you. I got to learn a lot. I’m sure the audience has learned a lot, but we went through a great little journey as you mentioned and the way we like to end the show is we like you to have the last word. So anything that you want to provide as advice to investors or startups, I turn it over to you and thank you again for your time.

CC: Thanks for having me. It’s been fun. I would just say if there this is probably going to be, you know, we’re coming out of a really difficult last year stating the obvious, but I think post pandemic, we’re going to see a tremendous amount of innovation, like more than we’ve never ever seen before and there’s founders working on this stuff right now. So one, if you’re an investor get invested in this asset class like now. Great that you got the stock market or your real estate and we’d love to have your check for fund 2, or fund 3, invest it somewhere. Don’t ignore this in a thoughtful portfolio way. If you’re a founder kind of thinking, waiting him and hun, get off, get off the sideline and, and go because like I said, you know, if you look at history, some of the best innovation comes through like the most harrowing terrible times. So that would be my advice.

JP: I love it and support that wholly, that get more investors out there investing in funds and helping early-stage companies because it’s a pretty exciting asset class.

CC: Important one. We’re not curing cancer, but it’s, you got to support them earlier. You’re not going to see, look, everyone loves technology when it works for them, right? And it solves problems pushing a button to get X and pushing a button for things to come to you. Like. So unless you’re supporting them early, it’s kind of hard to get sort of get those benefits. So that’s kind of where I was going with that.

JP: Agreed. I love it. Well Chris, again, thank you very much for time today. It was brilliant. Well, certainly tag you and post it and keep you aggressive when it does launch.

CC: But reported that and sharing it and I enjoyed the conversation.

JP: Likewise.

CC: Thanks man.

JP: Have a great day!

CC:You too!

JP: Brilliant. You know what? I love the fact that you really talked about that whole reports. I think that, you know, do what you say and and make it happen and all those things that really refine how a startup needs to focus and work and get their investors aligned to where they want to go, huge, huge, huge! So, and to all of his advice, you know, there’s gonna be a lot of action happen in the next little while when we roll out this pandemic and you need to be ready for it. So spring, summer time’s coming. So hopefully, that opens up a lot more doors, but it was a pleasure talking with Chris.

So you guys have a great day. Thank you!

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