From Founder to VC: a founder’s perspective from the investor’s side of the table
M13’s entrepreneur in residence describes going from founder/operator to working at a VC firm.
M13 recently posted an opportunity for founders to join M13 as an Entrepreneur in Residence (EIR). Our Launchpad EIR shares what it’s like for a founder and operator to work at a VC firm M13.
Rob Smith
Founder & M13 Entrepreneur in Residence
As a lifelong entrepreneur, I’ve been in the startup space and interacted with many venture capitalists. But I’d be lying if I told you I had ever envisioned myself working at a venture capital firm. Apart from some angel investments, I just never pictured myself on the other side of the table, listening to the pitch rather than giving it.
Throughout the years, even decades now, I’ve stayed firmly planted on the startup side of the equation. While founders share the startup ecosystem with investors, we can sometimes appear to be “frenemies,” hopelessly dependent on one another for survival, but often negotiating against each other in what may appear to be a zero-sum game. Investor win = startup loss, and vice versa.
So what made me go over to the other side of the table?
Founders and the firm
For context, here’s a quick rundown of my career up until now. My first startup out of college was BlackSmith Studios, an award-winning film, VFX, film and ad agency where I won young entrepreneur of the year in the UK (2012). I also launched Pecabu, a pioneering AI-powered martech startup out of San Francisco. I then consulted as an interim CxO (mainly CPO, CRO and CMO positions) at a number of VC-backed and public companies out of the Bay Area helping sell everything from wine to AI-powered SaaS to medical devices. Most recently, I founded a future of work startup, TeamHuddle, backed by M13.
What attracted me to M13 when I was founder at TeamHuddle is that it was designed and still run by former founders and operators of startups. I strongly believe this helps startup founders build better and faster. They also have a strong investor-operator model, which intrigued me.
I know what you’re thinking: every VC firm’s website has some variation of “we go beyond capital” and/or “we truly support our founders.” In my experience working with VCs, this rarely happens. M13 backs their model with a full-time operating team that is 2.5x larger than the investing team.
Launching a startup is very hard, and founders need all the help they can get. As an example, when we were struggling to fundraise in a chaotic market, M13 partners Karl Alomar and Anna Barber both stepped in personally and strategized with me to make edits to our deck that ultimately better framed the value proposition and made our story clearer to investors.
The job: what is an EIR anyway?
An Entrepreneur In Residence’s job description can be fuzzy: a combination of investment advisory, due diligence, startup consultant, and maybe an academic research project or two. In reality, many friends in EIR positions I know spend their time pondering their next big idea. That's not what an EIR at M13 does. In my first few weeks, my schedule has been packed with talking to and learning about the dozens of amazing companies in the portfolio.
My main mission has been actively engaging portfolio companies within my areas of expertise: product, go-to-market strategy, and leadership. My work with founders ranges from advising on strategy, reviewing their marketing, fundraising materials or simply connecting them with a developer or designer. Unlike a consultant however, I go much more in depth with founders and work side by side to execute core projects essential to the startup’s success.
I’ve been a founder a number of times and know that founder life can be incredibly hard and lonely, and it’s nice to talk to someone who has been there, done that. This is another reason to have investors with strong startup backgrounds; they understand not just the metrics but the constant emotional ups and downs that every founder faces.
On the ground founder support
It’s not just me though. M13’s core mission is to actively work with early-stage startups and fill in the gaps that founders have. To illustrate, in only a few weeks, I’ve been involved in or aware of projects such as:
- High-level analysis of over 70 portco websites (content, copy, and best practices) to help founders improve front-facing materials
- Advising on three fundraising decks commenting on content, helping tell stories, or giving feedback on practice pitches
- Helping two startups in building their GTM strategy (a surprising number of amazing founders ask for help with this)
- Product feedback, roadmapping and planning
- Recruiting new leaders to join growing startups
- Participating in community events, making introductions and holding fascinating conversations between current and prospective founders
There are a good half dozen other meaningful projects that I’ve left off the list for brevity. Bonus example: I’m working with a partner to help a company that’s struggling to either shut down cleanly or find a small exit in a way that maximizes value for founders and investors. These projects are never fun but always valuable. Good partners are not only by your side in the ups, but also the downs.
What’s essential for M13’s model to work is founders who are open to collaboration. It’s not always easy to admit to your investor that you’re trying to figure something out and need help or a sounding board. But it’s vital for a firm like M13 who can help and who has full-time operators to know about issues before they become crises. The portfolio founders I’ve met have been a great group, and highly proactive in reaching out when they think we can help.
Investing with a founder-focused model
I’ll be honest: when I first heard about how many resources M13 puts into this active support strategy, I was concerned. As a founder, obviously, it’s great. Essentially free resources in hiring, strategy, product, and marketing when you’re a tiny startup and need it the most; sign me up!
But why would M13 do this when the status quo is investors writing a check and disappearing until the next quarterly catch-up? It felt like an expensive approach, and while the fund has consistently had phenomenal performance, are the results tied to this methodology? M13 Partner Rob Olson’s research makes a compelling case that it does.
And now that I’m on the inside, I can see the flywheel in action because I’m part of it. From my point of view here’s how it works:
- More plugged-in: When you’re consistently and regularly engaging with portfolio companies, you understand not only the company better but the industry and challenges startups are facing. This gives a deep perspective on future investments in the space/industry that other investors may lack.
- Higher success rate: Solving issues with portfolio companies before they become crises effectively reduces failure rate. In an economic downturn, like the one we’re currently experiencing, this impact is magnified, resulting in more investments surviving and rebounding.
- Better deals: M13 leads and participates in highly over-subscribed rounds because investors and founders know the value you bring to the table is really more than cash. As an example, M13 has participated in amazing web3/blockchain deals, rarely accessible by similarly sized generalist funds, such as STEPN.
Culture, inclusivity & diversity
Close your eyes and think about what an investor looks like. You might be thinking about a stereotypical “finance bro.” That culture is another reason I thought the VC world was just not for me.
Then why this firm? M13 visibly focuses on inclusion and diversity, which as a minority myself, is very important. There are more women and people of color here than you would expect. This extends across all levels of the organization, as well as our founders, with the majority of the people I interact with on a daily basis being members of under-represented communities, ethnicities, and backgrounds.
I fundamentally believe diversity makes for better investors. A variety of opinions, perspectives, and viewpoints across an investing team, especially in a consumer-focused firm, allows for a more accurate viewpoint of your target market. Diversity is simply better for business.
The other side of the table
So how’s it going? What started as a way to fulfill my passion to help startups grow and succeed while in between my own ventures has evolved into a new passion to impact dozens of startups utilizing a larger platform.
When you’re running your own startup, as I have for decades, your mindset is, “my startup vs the world”. At M13 the question becomes, “How do I help as many startups as possible in my limited time?”. I’m starting to see the bigger picture.
Over the next few months, I hope to not only gain a new perspective on entrepreneurship but also become a better entrepreneur and investor. I’ve been good at building teams, and now I’m gaining more data on how integral leadership teams are to success. I’ve pitched my startups hundreds of times, and now I’m learning about the process that continues after the founders leave the room. Every facet of the startup game that I thought I’d mastered is now opening up new avenues of learning and growth for me personally.
How to get in touch
Please get in touch with Rob if you want to learn more about founder resources and opportunities for founders and operators at M13.
Contact Rob at rob.smith@m13.co.
Rob Smith
Founder & M13 Entrepreneur in Residence
As a lifelong entrepreneur, I’ve been in the startup space and interacted with many venture capitalists. But I’d be lying if I told you I had ever envisioned myself working at a venture capital firm. Apart from some angel investments, I just never pictured myself on the other side of the table, listening to the pitch rather than giving it.
Throughout the years, even decades now, I’ve stayed firmly planted on the startup side of the equation. While founders share the startup ecosystem with investors, we can sometimes appear to be “frenemies,” hopelessly dependent on one another for survival, but often negotiating against each other in what may appear to be a zero-sum game. Investor win = startup loss, and vice versa.
So what made me go over to the other side of the table?
Founders and the firm
For context, here’s a quick rundown of my career up until now. My first startup out of college was BlackSmith Studios, an award-winning film, VFX, film and ad agency where I won young entrepreneur of the year in the UK (2012). I also launched Pecabu, a pioneering AI-powered martech startup out of San Francisco. I then consulted as an interim CxO (mainly CPO, CRO and CMO positions) at a number of VC-backed and public companies out of the Bay Area helping sell everything from wine to AI-powered SaaS to medical devices. Most recently, I founded a future of work startup, TeamHuddle, backed by M13.
What attracted me to M13 when I was founder at TeamHuddle is that it was designed and still run by former founders and operators of startups. I strongly believe this helps startup founders build better and faster. They also have a strong investor-operator model, which intrigued me.
I know what you’re thinking: every VC firm’s website has some variation of “we go beyond capital” and/or “we truly support our founders.” In my experience working with VCs, this rarely happens. M13 backs their model with a full-time operating team that is 2.5x larger than the investing team.
Launching a startup is very hard, and founders need all the help they can get. As an example, when we were struggling to fundraise in a chaotic market, M13 partners Karl Alomar and Anna Barber both stepped in personally and strategized with me to make edits to our deck that ultimately better framed the value proposition and made our story clearer to investors.
The job: what is an EIR anyway?
An Entrepreneur In Residence’s job description can be fuzzy: a combination of investment advisory, due diligence, startup consultant, and maybe an academic research project or two. In reality, many friends in EIR positions I know spend their time pondering their next big idea. That's not what an EIR at M13 does. In my first few weeks, my schedule has been packed with talking to and learning about the dozens of amazing companies in the portfolio.
My main mission has been actively engaging portfolio companies within my areas of expertise: product, go-to-market strategy, and leadership. My work with founders ranges from advising on strategy, reviewing their marketing, fundraising materials or simply connecting them with a developer or designer. Unlike a consultant however, I go much more in depth with founders and work side by side to execute core projects essential to the startup’s success.
I’ve been a founder a number of times and know that founder life can be incredibly hard and lonely, and it’s nice to talk to someone who has been there, done that. This is another reason to have investors with strong startup backgrounds; they understand not just the metrics but the constant emotional ups and downs that every founder faces.
On the ground founder support
It’s not just me though. M13’s core mission is to actively work with early-stage startups and fill in the gaps that founders have. To illustrate, in only a few weeks, I’ve been involved in or aware of projects such as:
- High-level analysis of over 70 portco websites (content, copy, and best practices) to help founders improve front-facing materials
- Advising on three fundraising decks commenting on content, helping tell stories, or giving feedback on practice pitches
- Helping two startups in building their GTM strategy (a surprising number of amazing founders ask for help with this)
- Product feedback, roadmapping and planning
- Recruiting new leaders to join growing startups
- Participating in community events, making introductions and holding fascinating conversations between current and prospective founders
There are a good half dozen other meaningful projects that I’ve left off the list for brevity. Bonus example: I’m working with a partner to help a company that’s struggling to either shut down cleanly or find a small exit in a way that maximizes value for founders and investors. These projects are never fun but always valuable. Good partners are not only by your side in the ups, but also the downs.
What’s essential for M13’s model to work is founders who are open to collaboration. It’s not always easy to admit to your investor that you’re trying to figure something out and need help or a sounding board. But it’s vital for a firm like M13 who can help and who has full-time operators to know about issues before they become crises. The portfolio founders I’ve met have been a great group, and highly proactive in reaching out when they think we can help.
Investing with a founder-focused model
I’ll be honest: when I first heard about how many resources M13 puts into this active support strategy, I was concerned. As a founder, obviously, it’s great. Essentially free resources in hiring, strategy, product, and marketing when you’re a tiny startup and need it the most; sign me up!
But why would M13 do this when the status quo is investors writing a check and disappearing until the next quarterly catch-up? It felt like an expensive approach, and while the fund has consistently had phenomenal performance, are the results tied to this methodology? M13 Partner Rob Olson’s research makes a compelling case that it does.
And now that I’m on the inside, I can see the flywheel in action because I’m part of it. From my point of view here’s how it works:
- More plugged-in: When you’re consistently and regularly engaging with portfolio companies, you understand not only the company better but the industry and challenges startups are facing. This gives a deep perspective on future investments in the space/industry that other investors may lack.
- Higher success rate: Solving issues with portfolio companies before they become crises effectively reduces failure rate. In an economic downturn, like the one we’re currently experiencing, this impact is magnified, resulting in more investments surviving and rebounding.
- Better deals: M13 leads and participates in highly over-subscribed rounds because investors and founders know the value you bring to the table is really more than cash. As an example, M13 has participated in amazing web3/blockchain deals, rarely accessible by similarly sized generalist funds, such as STEPN.
Culture, inclusivity & diversity
Close your eyes and think about what an investor looks like. You might be thinking about a stereotypical “finance bro.” That culture is another reason I thought the VC world was just not for me.
Then why this firm? M13 visibly focuses on inclusion and diversity, which as a minority myself, is very important. There are more women and people of color here than you would expect. This extends across all levels of the organization, as well as our founders, with the majority of the people I interact with on a daily basis being members of under-represented communities, ethnicities, and backgrounds.
I fundamentally believe diversity makes for better investors. A variety of opinions, perspectives, and viewpoints across an investing team, especially in a consumer-focused firm, allows for a more accurate viewpoint of your target market. Diversity is simply better for business.
The other side of the table
So how’s it going? What started as a way to fulfill my passion to help startups grow and succeed while in between my own ventures has evolved into a new passion to impact dozens of startups utilizing a larger platform.
When you’re running your own startup, as I have for decades, your mindset is, “my startup vs the world”. At M13 the question becomes, “How do I help as many startups as possible in my limited time?”. I’m starting to see the bigger picture.
Over the next few months, I hope to not only gain a new perspective on entrepreneurship but also become a better entrepreneur and investor. I’ve been good at building teams, and now I’m gaining more data on how integral leadership teams are to success. I’ve pitched my startups hundreds of times, and now I’m learning about the process that continues after the founders leave the room. Every facet of the startup game that I thought I’d mastered is now opening up new avenues of learning and growth for me personally.
How to get in touch
Please get in touch with Rob if you want to learn more about founder resources and opportunities for founders and operators at M13.
Contact Rob at rob.smith@m13.co.
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The views expressed here are those of the individual M13 personnel quoted and are not the views of M13 Holdings Company, LLC (“M13”) or its affiliates. This content is for general informational purposes only and does not and is not intended to constitute legal, business, investment, tax or other advice. You should consult your own advisers as to those matters and should not act or refrain from acting on the basis of this content. This content is not directed to any investors or potential investors, is not an offer or solicitation and may not be used or relied upon in connection with any offer or solicitation with respect to any current or future M13 investment partnership. Past performance is not indicative of future results. Unless otherwise noted, this content is intended to be current only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in funds managed by M13, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by M13 is available at m13.co/portfolio.