CoVenture got started during my senior year of college. I’m often asked “how did you convince your first LP’s to back you?”
As you might imagine, the story is really non-linear. And no, I didn’t have parents who bankrolled the fund. So I decided to write it down below so I could reference it later.
Going (way) Back:
(1) When I was an undergrad, I made a good impression on one of my professors (Dima Epstein).
During my first year at Cornell I was nervous about getting bad grades (I had not been a great student in high school, and had gotten into school for baseball). Because of that, I studied non-stop and got over a 4.0 my freshman year.
I didn’t do anything but study… and I took an easy courseload. So getting good grades wasn’t the hardest thing to do. But it made a good impression on my professors.
I also did research for Dima. I’d like to think I was his hardest working Research Assistant (especially the first year, before I recruited Chelsea Rowe to do research with me), and that made him like me.
So when Dima found out I was trying to do my first startup, he elected me to a panel at Georgetown centered on Internet Governance. I had no business being there — but Dima had recommended me… and so there I was.
On that panel I spoke about policies surrounding cloud computing, privacy and IP. The main debate was around: how important it was for companies in Africa to have similar laws to each other, because otherwise startups would have trouble complying with different laws for different users — especially when those startups were brand new and didn’t have enough staff to build multiple versions of their applications for multiple user-bases.
Anyways — I spoke on that first panel, and it went well so I was then asked to go speak at the United Nations in Kenya (to basically say the same stuff).
(2) When I went to Kenya, and people asked me “what I did,” I told them I was a consultant. I didn’t totally know what that meant, but I didn’t want to tell people I was just a student. I was a sophomore in college, so for me it was a pretty wild experience.
At the conference was Jamil Goheer. And after my panel, Jamil came up to me to talk about helping him find customers in the United States. Another consultant of an African country came up to me to request my help building an incubator he was putting together.
I said yes to both things, and didn’t get paid for either (actually, I think Jamil paid me a really small amount… I think I charged him $40/hour and I thought that I was RICH!).
But once I started helping Jamil and this other country with small projects, I actually WAS a consultant… sorta. And I started telling people about how I was (a) “helping a company based in Pakistan move its presence into the US” AKA — I was making sales for them, and (b) helping a country build an incubator (which I really ended up doing). Both of these were crazy random, and I got the jobs because I was free, or close to free.
But I started showing up to events, and used these two projects to sell myself to other clients who actually started to pay me.
Going to a lot of these events sucked. For one, I couldn’t get into all of them because I wasn’t 21. Especially if the events were at bars. For another, most people ignored me and didn’t want to talk to a college kid. And three, being at an event by yourself is lonely. I spent a lot of time pretending to look at my phone so that people didn’t realize I had no one to talk to.
I wasn’t really picky about which events I’d go to, because I didn’t really have a “target audience.” Basically, I’d show up to events, ask people about their businesses, and based on what they’d tell me I’d figure out some project to pitch them.
(3) Over time I met enough people, and did enough consulting project, where I started to get hired consistently, and I began meeting “real adults in the workplace.”
I set up a newsletter to update my new network of clients (and network of people who refused to be my clients) on what I was doing. It was a 4x4 matrix of “what I was working on, what went wrong/how I was fixing those things, what I wanted to accomplish by next month, and specific asks.”
I would send it to anyone I thought could one day be helpful — and there was no unsubscribe button. If I knew you, and I liked you, and I had your email… you were getting the damn newsletter. And this kept people engaged. The best thing about it, is that when I would reach out to someone for help — it wasn’t a cold email anymore. They recognized my name and we had “been in touch.”
But I still didn’t know any VC’s.
So I got together with Brian Harwitt — a close friend of mine in college, and we started building research reports on certain industries. Here’s a few examples:
Elderly Care Report: https://www.slideshare.net/AliHamed3/co-venture-elderlycare
Marketplace Infrastructure: https://www.slideshare.net/AliHamed3/marketplace-infrastructure-research-team-final
I then started cold emailing VC’s who had portfolio companies in any of these industries, with a link to the report, asking them if they could spend 15 minutes on the phone to discuss.
I would send three available times, and about 2% of them said yes. The calls went better than you would have expected. I think most people want to take a call with a college kid, but don’t know what to talk about. By setting the agenda, and making it about something they found interesting, the conversation was much better than a typical: “hi, can I ask you for career advice” exchange.
After the call, I would then scan the VC’s linkedin for 5 people I wanted to meet. I’d send the name of these 5 people, and ask for intro’s to 2 of them. I’d also send a “Forwardable Email” that they could use to make the request. I didn’t want to have to force my new VC contact to draft their own email — that takes too much work.
A huge percentage of the phone calls I did led to new intro’s, and eventually I began building a critical mass of investors in my network so that I could go to events and tell people: “I know a lot of VC’s who like Elderly Care, do you want me to help you get funded?” I’d then start making intro’s for them — and to the entrepreneurs I was helpful, and to the VC’s I was a source of warm deal flow. I didn’t charge anyone for it — I just wanted to create a network.
I then started introducing VC’s to each other who had similar interests. I would say something like: “you two would like each other, how about the three of us get drinks.” But making it the “three of us” I was including myself in a catch-up, I was associating myself with other VC’s, and I was doing a favor to two people who I would one day be asking for help from.
It’s always better to be a net creditor than a net debtor in professional relationships. (not that I think of it this commercially).
At some point — I had made so many intro’s between peer VC’s, they started making intro’s for me. Calling me a “person with good deal flow.” It got to the point where I had started the flywheel. I was getting as many intro’s as I made. From there on out…meeting people in VC became easy.
(4) Over time, I had made enough money doing consulting where I could make a couple of tiny angel investments. But I wanted to raise capital so that I could invest beyond my own means — so it was time to start mining the network I created.
I had a couple of pitches:
(1) I was only raising $400k, so the min investment was $25k. And I would only call the capital over an 18 month period so investors owed me ~$4k/quarter. I was the most affordable way to invest in startups!
(2) I had built a network and the deal flow I had was actually pretty good.
(3) The first startups I had invested in seemed to be doing pretty well.
Any time one of my direct contacts invested, I would go through their Linkedin and find 5 more people I would want to meet. I would then send them an email that something like:
I’m really excited to have you as an investor, and hopefully this is the beginning of a long relationship.
I noticed you know a handful of other people I think could be amazing for the fund. I’ve listed their names below. Are there two people on this list you’d be open to pinging to see if they’d be willing to meet with me? In the event there are, I could send a forwardable email to help with an intro request?
Then — if the person agreed to send along a Forwardable Email to two of those people, I’d provide them with one.
WHAT IS A FORWARDABLE EMAIL?! It’s the most useful thing in your entire toolbox.
It’s an email, written in a separate email thread (NOT A REPLY TO AN EXISTING EMAIL) that the receiver can just forward to the intended target.
An example Forwardable Email will look like this:
I hope you’re well. I was wondering if you might be open to connecting me with [person I want to meet]. I saw you are connected with them, and I’d love to meet them because [reason you want to meet them, and usually something flattering].
Any chance you’d be open to connecting us? If not, no stress. Below I’ve included some info about myself in case it helps.
[Brief blurb about myself].
(5) Finally — I had met enough people that I could raise the $400k I needed to begin actively angel investing $25k at a time (which in 2014 still qualified as a real angel investment, back when seed rounds were still ~$500k-$1M.
And like a lot of investors, my main job was to help our portfolio companies raise money. And through that, I got to know a handful of partners at VC firms who became massively helpful to us.
As the companies in our portfolio grew to a size that my $400k couldn’t support anymore, I started to raise SPV’s. An SPV is a legal entity set up to only do one thing (in my case, to only make one investment).
And these were easier to raise money for. Why? Because when you raise money for an SPV, you don’t have to convince people to like you, and your blind judgment — you only have to convince them to like the deal you’ll be investing in.
The three inflection points of my network.
Inflection Point 1:
One of the people I had met in undergrad was Savneet Singh. Savneet is my partner now, but at the time was just a successful Cornell alumni who I wouldn’t stop bothering. When I started showing him the SPV’s I was setting up — he was impressed by them, and agreed to get half the capital in exchange for splitting the economics.
In reality — Savneet got most of the money. While my network was new, his network was huge, and he had made money for a lot of people he knew (which is a really powerful thing). But JV’ing with him on these SPV’s, I got to know his network.
Inflection Point 2:
Often, I’d send these deals to VC friends of mine, and one guy in particular (David Hirsch) introduced me to Marc Spilker.
Marc, Scott, Rick and Glen of GPS became some of our biggest champions. They invested in the first SPV I set up, and then many of our deals/funds after that. They also invested in our GP to give us equity capital to hire good talent. Beyond the capital — they gave us credibility.
Inflection Point 3:
At roughly the same time, I reconnected with Jarett Wait. Jarett was the former CEO of Lehman Asia and exec committee of Fortress. He was also a Cornell alumn who I had met through Steve Kurz (another Cornell alumni who used to work for Jarett). I told Jarett that I had a handful of high quality investors and that I had made some good investments, but that I wasn’t sure how to keep scaling the firm.
Jarett not only became an advisor to us, but also a board member, a coach, and an onramp to a brand new universe of people. He introduced me to anyone in finance I had ever wanted to meet.
Every once in a while you come across someone who helps so much you can never quite thank them enough… I have more of those people than I ever should have had… and Jarett is certainly one of those people.
(6) Between Savneet, GPS and Jarett, I had the credibility and access to intros to LP’s. And because they had become my LP’s, I had the chance to make the money.
And once we started making them money… they started making intro’s for us. And then the flywheel began again.
Every person I know can be traced to another person before them. Henry Ritchotte has become one of our most helpful investors — and I got to know him because GPS introduced us to John McEvoy, who then introduced me to Henry.
I got to know my partner, Jesse, because Nikhil (who was one of the VC’s I used to cold email) introduced me to him a long time ago when we were first setting up our SPV’s for Produce Pay.
I got to know my partner, Marc Porzecanski because Howard Han introduced us back when he worked at Thayer Street, and I met Howard through Savneet.
So what are the key takeaways?
(1) Find ways to help people first — even if it’s just writing research reports they never asked for, or making an intro they didn’t realize they might want. Make sure you walk away from every interaction thinking: “how can I help this person?”
(2) Make yourself easy to be helped. Send forwardable emails, ask specific questions, and send three available times.
(3) Once you get introduced — be prepared, make a positive impression, and follow up.
- I can’t name more than 2–3 times in my life I didn’t send a follow up email with an action item after a meeting.
(4) Keep grinding until you find your inflection points. Sometimes they’ll come easily, and sometimes they take time. And once you find one of those people who will act as your inflection point — make a crazy positive impression on anyone they intro you to (even if you don’t want to take the meeting).