First Funders

Elizabeth Yin realized she had a problem. She wanted to be a founder, but couldn’t think of a problem she wanted to spend decades of her life working on. After soul searching, she remembered the one thing she did care about: helping other founders.

She took that passion and turned it into Hustle Fund, which focuses on offering capital, knowledge, and networks to “hilariously early-stage” software startups. She also angels invests in non-software D2C companies. She’s invested in over 800 startups, with two of her most notable being Webflow and Mejuri. 

We chat with Elizabeth about why valuation matters if you have a smaller fund, why she thinks certain hot spaces like AI might not yield the types of returns investors think they will, and what happens when founders misbehave (and commit fraud and flee to Russia). 

Elizabeth invests $150k checks into idea-stage B2B software, digital health, and fintech companies through Hustle Fund. 

Highlights: 

• When Elizabeth says she invests at an early stage, she means it. Hustle Fund invests in founders who have an idea and are pre-revenue.

• Elizabeth talks about the difference between small sub-$100M funds and large multi-stage funds. As a smaller fund, you need to make your checks count by deploying them into startups where they’ll make a true difference. Multi-stage funds are investing early to have the option to write a bigger check in later stages. 

• Higher exits usually mean higher entry points for investors. If you’re not a multi-billion dollar fund, you probably want to focus on investments with lower entry points and in return, lower multiples. In the end, both lead to similar quantified outcomes.

• You don’t want to invest in overcrowded spaces because your chances of realizing alpha decreases when there are more hands in the pot. Finding unpopular spaces with less competition is where Elizabeth likes to focus.

• (00:00) - 13: Elizabeth Yin of Hustle Fund has seen over 50,000 companies and made 800 investments – usually in just 30 minutes

An ill-fated business school fashion show led to a venture capital fund with $215 million AUM. 

The duo met in 2010 at the MIT Sloan School of Management and soon after became research partners investigating why VCs were shunning startups in highly regulated spaces even though AirBnB and Uber were starting to reach venture scale very quickly. Tech-enabled startups impacting how we live in the real world were new (back then). Their research sparked Tumml in 2012, an early-stage accelerator, and culminated with the Urban Innovation Fund I in 2016. Now on their third fund with $215M in AUM and multiple exits, including CodeSpark Academy (acquired by BEGiN) and Electriphi (acquired by Ford). 

In this episode, Clara and Julie share how they lean into regulated spaces, take advantage of macro trends, and uniquely focus on the relationship between cofounders when investing—lessons from their own highly effective partnership.

Clara and Julie invest $500K to $3M into pre-seed and seed startups that make cities more livable, sustainable, and economically viable. This urban thesis covers sectors like climate tech, financial services, transportation, fintech, education, proptech, and future of work.

Highlights: 

• Clara and Julie had a hypothesis that urban tech was not only going to take off, but that it was also worthy of VC capital, contrary to what some of the top VCs thought at the time. 

• Sometimes, the role of an investor is to support other investors just as much as the founders. Clara and Julie explain the importance of being the investor who steps up and gains consensus among the other LPs when disputes or dilemmas arise. 

• The opportunity to invest in Electriphi, an electric vehicle fleet management software company, led to an acquisition that returned most of their second fund – all because they were brave enough to bet on the macro trends and tailwinds. 

• Matching up founders with opposite skill sets might work out, but Clara and Julie would much rather find people who truly mesh on deeper levels. 

• (00:00) - FIFU 13 - Julie Lein & Clara Brenner

Have you ever played with an Oculus VR headset? You probably owe thanks to Arian Ghashghai. The former founder was working at Meta when someone in his network introduced him to an opportunity to invest in gummies. Yes, gummies. 

That’s far and away from Arian’s machine learning roots, it’s now one of his best investments to date. Arian has since gone full-time into investing as the founder and managing partner at his own fund, Earthling VC, which specializes exclusively in making pre-seed investments into companies in the AR/VR and robotics domain. One of his investments is on track to do $20M in revenue this year after only needing to raise a single $1M round. We cover a lot of good ground in this episode, and we really get into how the rise of these “raise-once” companies is changing traditional VC models. 

Arian invests $25K to $200K in pre-seed AR/VR and robotics startups through Earthling VC. 

Highlights: 

• Arian was a founder and quickly realized he hated being a founder. He started at Meta as an applied machine learning software engineer and angel invested for the first time in a CPG company, a decision largely driven by how impressed he was by the founder. 
• To Arian, worse than losing money is being labeled as another dime-a-dozen investor with no unique insight or edge. That’s why he advocates for being a big fish in a small pond to reduce competition and make it easier to stand out. 
• Arian explores why VCs have traditionally been skittish about getting into VR and robotics, and why there’s never been a better time than now to start investing in these categories.
• Arian is seeing a trend among companies that only need to raise capital once before they can rely on their own profitability. 

• (00:00) - How one of Arian Ghashghai’s virtual reality companies is on track to hit $20M in revenue after one round of funding

Armed with an educational background in computer science and biomedical informatics, Amit Garg switched to venture capital after a long, successful career in the corporate world, which included stints at companies like Google and Samsung.

And that’s just the way he never planned it. 

That’s right, the almost-doctor didn’t intend to get into venture capital, and he certainly never planned on starting his own fund. He was drawn in by his innate need to build things, including relationships with people. He partnered up with his officemate from Norwest, Sanjay Rao, and the two started Tau Ventures in 2019, an AI-first, early-stage fund focused on healthcare, enterprise, and automation. 

Amit tells us about his very targeted approach to investing, which is different from the “spray and pray” method we’ve seen from friends of the pod and other investors in general. We also get to hear first-hand accounts about the importance of building trust with your investing partners and your founders. Plus, Amit gives us his take on the state of healthcare and AI and why – despite all the challenges – he’s hopeful about where it’s headed. 

Amit primarily invests $500K in Seed-stage healthcare, enterprise, and automation startups and occasionally in Series A, B, and C through Tau Ventures. 

Highlights:

• Amit turned down a spot in medical school and pivoted his original ambition to become a doctor by first joining Google, pivoting to VC, and then becoming a digital health founder.
• He got into the corporate side of venture capital after business school, but he never had any interest in starting his own fund. That is until his friend and former officemate convinced him that an AI-first venture fund was a great idea in 2019. 
• Amit explains that the “why” behind his investing does come from a place of self-interest – which is much different than selfish. He feels that when he pursues and realizes his own self-interests, he can help others to the same.
• Why a founder shut down a company in his portfolio and why Amit decided to back him again basically the next day. 
• How he sees the interplay between angel and institutional investors and why they’re both necessary 
• Amit’s frustration with healthcare and how it fuels his passion to make it better. Plus, he explains why he keeps his focus on the three legs of the healthcare tripod.  

• (00:00) - FIFU 11 - Amit

What do you get when you mix U.S. national security, angel investing, and kids’ pajamas? Atlee Clark. Proud Canadian Atlee took a hard pivot from the public sector to the tech world, first through a nonprofit called the C100, which supports entrepreneurs, and later at Shopify, focusing on 0 - 1 initiatives. Similar to other angel collectives emerging at the time like Hashtag Angels and Operator Collective, Atlee tapped into her executive network at Shopify to connect with other female leaders who were looking to invest on the side. 

What began as informal conversations about investing and advising after the working day coalesced into Backbone Angels, a collection of executive tech women sourcing angel opportunities collectively and making investments individually. Backbone was started in 2021 and has amassed a portfolio of over 40 early-stage startups, including Bird&Be, 1Password, and Blume.

Atlee tells us what it’s like to balance functioning as a cohesive unit while making individual investment decisions. Plus, we get to hear about her journey as a small business owner and what motivates her to invest in what she wants to see in the world. 

Atlee writes angel checks of $10k to $20k, ideally at the friends and family round or at pre-seed, focusing on startups that address challenges for parents, small business owners, and Big Tech execs—three areas she intimately understands as the end user. Backbone Angels focuses on companies led by Black, Indigenous, and Women-led startups. 

Highlights:

• Atlee hopped on a one-way plane to San Francisco and left her U.S. national security gig in Washington, D.C., behind to head up a nonprofit organization supporting Bay Area Canadian tech entrepreneurs (and she’d never even worked in tech!)
• She met early Shopify execs who convinced her to come work for the company doing developer relations and the app ecosystem. Casual conversations about investing and advising with her peers led to the creation of Backbone Angels.
• Atlee prefers to follow her own intuition with early-stage investing, but she does have a tried-and-true framework for determining if a deal is right for her. She shares her tips for working as a collective and the reason she believes you should never overthink a “no.”
• Angel investing is a side hustle for Atlee (Remember, she’s also a Shopify exec, small business owner, and mom), and she prefers it because it fulfills her in a way that going full-time wouldn’t.   

Resource:
Want to Angel invest with other operators and learn from the team at Hustle Fund? Check out Angel Squad and resources created by Brian Nichols

• (00:00) - Atlee Clark, Angel: Canadians breaking into tech and now investing with intuition and purpose

Join Shaherose & Aamir as we reflect on our conversation with Charles Hudson of Precursor Ventures. 

Highlights: 

• Don’t forget the macro: Government regulations can lead to massive opportunities or failures. We discuss case studies of companies like Samsara, Movtive (fka KeepTrucking), Republic, and Zum, showing how regulatory shifts led to category-creating opportunities. Charles’ worst investment was wiped out due to changes in government regulation. 
• Team vs market: We discussed the interplay between having the right team, idea, and timing for startup success. Charles evaluates opportunities 70% team and 30% idea. Both Aamir and I take a more balanced approach than Charles does.
• Fund size vs. outcomes: Reflecting on the past learning, "Your fund size is your strategy." We wonder what role that played in Charles’ decision to invest in the Athletic, later acquired by the NY Times for $550M.

Links:

• Follow Charles Hudson on Twitter: @chudson
• Read Charles’ blog on Substack
• Learn more about Precursor Ventures: Precursor Ventures
• Connect with Charles Hudson on LinkedIn: Charles Hudson

Connect with Us:

• Follow the First Funders Podcast
• Newsletter with behind-the-scenes access and key takeaways
• Twitter/X: @shaherose | @avirani
• Email us with feedback and suggestions on topics and guests

Disclaimer: This is for information purposes only. This is not investment advice.

• (00:00) - Introduction and Format Change

Hailing from Michigan, Charles developed an early obsession with the public markets in high school. Charles Hudson is now the Managing Partner at Precursor Ventures, a pre-seed venture fund that has defined and has become synonymous with “pre-seed”. Charles is known for his ability to identify and mentor early-stage companies that have the potential to disrupt their industries - first and early - including companies like the Athletic (acquired by the NY Times for $550M), Bobbie (recently raised a $70M Series C), Carrot Fertility (recently raised $75M Series C) and Pair Eyewear (recently raised $75M Series C).

Charles writes checks of $250k - $500k at Pre-seed and Seed. He is a Generalist with a focus on digital health, media, and software.

Highlights:

• The boomerang back to VC: Charles shares his unique path from Michigan to Silicon Valley, starting in VC, then moving to Google and various startups before returning to VC.
• Founding Precursor Ventures: Charles spotted an opportunity to invest in non-obvious founders pre-product and pre-revenue while other firms moved upstream in 2015. This made him one of the first in a second wave of pre-seed firms to launch, and 10 years later, he’s become the go-to first funder.
• Evaluating Founders vs. Ideas: Charles is a founder-first investor (founder 70%, idea 30%). He shares his criteria for assessing talent and reveals indicators of success that have generated alpha in his portfolio.
• Investment Strategy over Trends: Even in the face of trends like crypto, AI, and the economic downturn, Charles stays steady and focused on people and his definition of pre-seed, not morphing with industry shifts.

Links:
Follow Charles Hudson on Twitter: @chudson
Read Charles’ blog on Substack
Learn more about Precursor Ventures: Precursor Ventures
Connect with Charles Hudson on LinkedIn: Charles Hudson

Connect with Us:
Follow the First Funders Podcast
Newsletter with behind-the-scenes access and key takeaways
Twitter/X: @shaherose | @avirani
Email us with feedback and suggestions on topics and guests

Disclaimer: This is for information purposes only. This is not investment advice.

• (00:00) - Intro

Eric Ries has invested in over 100+ early-stage startups. He is best known as the author of The Lean Startup, a must-read for entrepreneurs worldwide. He also founded the Long-Term Stock Exchange (LTSE), a new stock exchange designed to support companies with long-term goals. He recently launched a new podcast discussing ways to re-think corporate governance to be mission-first.

In Part 1 of our interview, he shared insights from angel investing. In Part 2, Eric shares his new ethos for startups rooted in long-term thinking, putting a company’s mission at the center of everything and aligning all stakeholders. This mission-first approach challenges the traditional capitalist, and data shows it leads to better company performance.

Eric writes checks of $10K or less as an Angel at the earliest stages. He is interested in mission-driven founders, education, fintech, AI, and more.

Highlights:

1. Eric Angel invests for reasons beyond financial outcomes. He focuses on giving back to people in his network, learning about startup approaches and various industries, and doubling down in areas he is passionate about. Any time he has strayed from his investing criteria, it hasn’t worked out. 
2. Advising then investing: Eric prefers to work with a startup as a friend or advisor before investing. He keeps his check size to $10K to support his goal of high-velocity learning. He can write more checks with smaller checks, which means more learning.
3. Investing as a spiritual journey: Eric practices introspection to support continuous learning and to avoid overgeneralizing when things don’t work out. When he invests, he applies Lean Startup thinking by asking, “Is this outcome falsifiable”? Invest -> Measure -> Learn. We guess this makes him is a "Lean Investor"
4. Eric’s second act after Lean Startup is supporting mission-first startups: He advocates for a new ethos that he believes will lead to better performance in the long term.
5. Eric shares tools for mission-first founders, including the Public Benefit Corporation, the LTSPV, employee voting trust, and more.

• (00:00) - Introduction to First Funders

• Follow the First Funders Podcast
• Newsletter with behind-the-scenes access and key takeaways
• Twitter/X: @shaherose | @avirani
• Email us with feedback and suggestions on topics and guests

Disclaimer: This is for information purposes only. This is not investment advice.

Rajiv Bala, GP of Clutch VC, a pre-seed and seed-stage fund exclusively investing in Texas. Rajiv is committed and bullish on the region with a hands-on approach to investing, working with founders on product feedback, team building, and more to see initial customer validation before investing. Rajiv also embraces sub $500 million outcomes to drive fund multiples rather than relying on Unicorn outcomes only. This episode pushed our thinking on what we know and practice here in Silicon Valley, reminding us that there is more than one way to achieve Alpha.

Highlights from our discussion:

• Starting startups, Texas style: Is it about 24/7 work-life or work-life balance? We discussed a Texas vs. Silicon Valley approach to company building. Can it work and drive outsized venture outcomes?
• Beyond chasing unicorns: Can you be successful with sub $500M outcomes in VC? We dug into how portfolio construction starts with fund size and what scale of outcomes matters to you.
• Does previous founder or operator experience make you a better investor? Rajiv believes it builds founder empathy, skills, and experiences that make you more effective in challenging moments.
• Selective incubation as a strategy: Rajiv will sometimes work with a team for 6 to 12 months before investing to gain information asymmetry, build conviction (or incertitude), and establish a genuine relationship ahead of the check. 

Topics

• (00:00) - Introduction to First Funders

Connect with Us

Follow the First Funders Podcast

Newsletter with behind-the-scenes access and key takeaways

Twitter/X @shaherose

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Email us with feedback and suggestions on topics and guests

Meka Asonye, a Partner at First Round Capital, started angel investing in 2018 while working at Stripe and joined First Round in 2021. He has made dozens of Angel investments and 13 Venture investments, and he's just getting started! While he focuses on B2B SAAS, he has not shied away from investing in audacious founders, from modernizing 911 call centers to putting the biggest satellites in space. Meka shares his approach to finding true outliers, a practice he began while uncovering hidden talent for the Cleveland Guardians. 

Meka writes checks of $2M to $5M as the lead at pre-seed and seed.

Highlights from the discussion:

• Meka's unconventional path to VC: from discovering high-potential baseball talent to leading sales at startups to VC
• Meka's first angel investment came from Craiglist!
• Exploring the frontiers: investing in Space and GovTech
• How Meka supports founder friends, honestly
• Leveling up in VC by learning from partners, retros, reviews, and reflection powered by process and data

This is for information purposes only. This is not investment advice.

Topics

• (00:00) - Kicking Off the First Funders Podcast with Meka Asonye

Connect with Us

Follow the First Funders Podcast

Newsletter with behind-the-scenes access and key takeaways

Twitter/X @shaherose

Twitter/X @avirani

Email us with feedback and suggestions on topics and guests