What a New VC’s Goals Look Like: Homebrew’s First Two Years

“The days are long but the years are short.” I was told this several times about becoming a parent but the same can be true about the life of a founder. Although the way we spend our days are different than the teams we’ve backed, Homebrew started in Jan 2013 with the goal of feeling like a startup, just one which writes checks instead of code. Our initial quarter together was spent fundraising: hustling to get meetings with potential investors, telling our story, hearing some “no’s” and, fortunately, “yes” enough times to quickly close a $35 million Fund I.

In one particular way, being a venture investor is simple: your ultimate metric for success is in the financial return you deliver to your investors. There may be a thousand different paths to this success and you might be judged on the quality or repeatability of the path your select, but there’s no vanity metric to hide behind. Our audited financials don’t tally the number of blog posts I’ve written or retweets received. They don’t give me bonus credit for spending time with our founders daily, weekly, monthly. I don’t get a free pass because I’m a “nice guy” if Homebrew underperforms. So Satya and I take an operator’s approach to ensuring we hit our targets – that is, attempt to measure and improve on time cycles much shorter than the 5-10 years it will ultimately take to judge our performance. There are two meta-ways we do this.

First, we have roadmaps which are independent of our need to fundraise every 2-3 years. We have 20 year roadmaps for Credibility in the marketplace, Community building with founders, co-investors and the broader world, and Counsel, mechanisms to provide scalable and effective assistance to companies.

Second, we have Goals, our version of OKRs. At the broadest level we had three goals spanning Years One and Two.

1. Get Homebrew operations up and running
2. Close the brand awareness gap between ourselves and the other top seed funds (who are 1-3 fund cycles ahead of us)
3. Overdeliver on the promises we made to founders we backed

#3 is the most important – all goodness as an investor at our stage starts with a great reputation among founders. The promise was to be their partners of conviction for the 0-3 years of their company (nominally Seed until B Round). To lean in and help them get to the right answer faster on anything they considered urgent. To be proactive, not just reactive. To increase the velocity and slope of their success, so they could realize the vision in their heads with greater probability. It doesn’t mean being blindly ‘founder friendly’ – I think every person we’ve worked with would say we’ve instigated ‘tough conversations’ at points, but it’s about having mutual trust that our words are backed by an honest assessment, and not pure self-interest (side note: I do think it’s incumbent for investors to proactively ensure founders they back truly understand the expectations of venture dollars. This is a conversation which should happen before the term sheet has been signed).

Since any goal worth having is worth measuring, we’ve got our own version of Net Promoter Score for whether we’re delivering for founders. It’s imperfect but works for us at this stage. We actually haven’t formally measured it while the fund was nascent but as the number of investments has grown now to 17 core companies, it’s something we’re going to assess more explicitly in 2015. Besides “would you ask Homebrew to participate in your next company” and “would you recommend Homebrew to other founders,” we want to make sure a founder would be able to easily recall something we did for them in the previous 30 days which made a meaningful difference for their company. For me, the consistent positive answer to this question moves past the throwaway answer of “yeah, they’re [Homebrew] good guys.” They’re so many ‘good guys’ out there – I don’t want to just be a nice guy who tweets about your company every now and then (ok, maybe, “all the time”). We want to be on your shortlist of people you believe can make a difference beyond the check we can write. And we need to deliver that not just through our hands but utilizing our advisors, other Homebrew founders and the skills of a broader community.

We use these three goals to inform our weekly/monthly/quarterly cadence. We still take on too much – a P2 priority basically means we’ll never get to it – but just like how startups should always have 30 days and +12 months goals, it drives a sense of urgency in a business where the long timescale can frustrate. Satya and I sat down this past Monday and came up with the goals for 2015-2016 (plus the associated subgoals for 2015 specifically). Setting a reminder to post about those in Jan 2017….

Want more of me? I blog at www.hunterwalk.com & tweet @hunterwalk