What's the best way to give back to the Minnesota Startup community?

Part four of my interview with Reed Robinson of Groove Capital and BETA .

Casey

So, speaking of the startup community in Minnesota, what would you say is the best way to give back to the startup community?

Reed

Probably depends on what resources you have available to yourself. If you have the means to invest, the best thing that you can do is invest. That's one of the most significant ways to make a meaningful impact.

If you can't, what are the other options? Sharing your expertise is certainly one. Mentoring. Making introductions. There's a variety of ways you can support founders. Buying their stuff. That's a big one.

That's probably second on the list of important things, especially early on. Is being customers.

Going to the events, telling... And encouraging them. Kind of depends on what each individual thinks they can do the best.

Casey

Yeah, absolutely. That's helpful. And going back to your number one, it's best to actually invest. What are the first steps to becoming a venture capitalist or an angel investor?

Reed

Um, they're very different answers.

What's the first step to becoming an angel investor? Well, I guess both of them. It's important that you have a tolerance for the risk factors and an ability to evaluate people and opportunities. I think that's probably the commonality. The venture capitalists; you're basically combining a startup and being angel investor into one thing. So you have to start a business, which means you need customers. Those are your LPs. And you've got to have the energy and wherewithal and competitive advantage to be able to stand up a venture capital firm, which I think sounds super sexy, but is actually a lot of paperwork and a grind in a lot of different ways and less sexy at the end of the day than I think, what a lot of people would imagine.

Reed

So I think there's a lot of people that might be drawn to it, not fully knowing what they're getting themselves into. What led me to decide I wanted to do that was when I was running the BETA Cohorts and I was talking to entrepreneurs about how to win, I would focus heavily on what is your competitive advantage. Like, why did you do this to begin with?

How can you be successful?

And I did the same thing to myself. I applied that to myself and I said, okay, what can I do? What do I have access to that nobody else has access to? Well, the answer to that question was I've got now hundreds of founders that I've met along the way. They know who I am, I know who they are, I know how to navigate this community because I built a lot of the infrastructure.

So I had relationships that I could tap for investors, I had relationships that I could tap for potential investments. And I felt like I had experienced enough that I'd seen what would eventually become our investment thesis, what to look for in really early stage companies.

Back to the question at hand of how to become somebody in venture. Well, you better have a pretty damn good idea of how you're going to get into really good deals and know what you're looking at and understand how the business model works for venture. Now, if you're an angel, I think that's a little bit different because you don't necessarily report to anyone but yourself. You can have different decisions based on what is your personal thesis.

Tactical difference between the two is like if I'm a general partner in a fund, my job is to return capital and so I have to make decisions that are going to do that. If I'm an angel, I might still desire to do that, but that might be secondarily considered amongst supporting a female founder or investing in the climate. I have more flexibility on my return potential to favor investments that mean more to me personally.

But in both cases, and I think that's part of the answer to the question, like having a thesis really matters if you want to be successful.

#angelinvesting #venturecapital #tcsw23 #startups #founders