002 - Mac Conwell, Founder and GP of Rarebreed
Forward Thinking Investors Podcast Recap
Published:
Duration: 22 min
Guests: Mac Conwell
Summary
Mac Conwell discusses his journey into venture capital, the dynamics of funding startups, and the traits he looks for in rare breed entrepreneurs.
What Happened
Mac Conwell shares that the 2020s present a unique opportunity to start a company due to the accessibility of resources and technology. However, venture capital has not kept pace with these changes, often remaining a mystery to those outside major hubs like San Francisco and New York. Conwell describes his daily life as a venture capitalist, filled with meetings and business development for entrepreneurs, likening his role to that of a glorified business developer. He recounts his own path into venture capital, which began with his technical background as a software engineer and his experiences with startups, including both successes and failures.
Conwell emphasizes the importance of 'unicorn hunting' in venture capital, where the goal is to find companies with the potential to reach $100 million in revenue within five to seven years. This potential is critical for VCs to provide returns that meet or exceed the fund's initial investment. He breaks down the economics of venture capital, explaining the significance of fund size, management fees, and the necessity of achieving substantial returns from a small percentage of investments.
The discussion turns to Twitter, where Conwell describes how he uses the platform to demystify venture capital, share personal experiences, and engage with a broader community. His approach on Twitter focuses on transparency and connection, discussing the nuances of the industry and the personal challenges faced by entrepreneurs and VCs alike.
Conwell defines 'rare breed entrepreneurs' as those who exhibit out-of-the-box thinking, particularly in customer acquisition and operating in legacy industries. He values founders who have unique strategies for gaining traction and who can navigate industries that have seen little innovation. Conwell shares anecdotes about entrepreneurs who have succeeded by finding unconventional solutions to overlooked problems.
Conwell advises founders to be clear about their customer acquisition strategies before seeking investment. His preference is for entrepreneurs who already understand their market and have developed effective methods for reaching customers, rather than those looking to use funding to solve these challenges.
The episode wraps up with Conwell encouraging entrepreneurs to connect with him, particularly through Twitter, where he is active and accessible. He hints at upcoming announcements that may provide additional ways to engage with him and his work at Rarebreed.
Key Insights
- The 2020s offer a unique opportunity for entrepreneurs due to the widespread accessibility of resources and technology, yet venture capital remains largely concentrated in major hubs like San Francisco and New York.
- In venture capital, 'unicorn hunting' involves identifying companies with the potential to achieve $100 million in revenue within five to seven years, a crucial target for delivering substantial returns on investments.
- Twitter serves as a platform for venture capitalists to demystify the industry and engage with a broader community, focusing on transparency and the personal challenges faced by entrepreneurs and VCs.
- Rare breed entrepreneurs are characterized by their out-of-the-box thinking, particularly in customer acquisition and operating within legacy industries, often succeeding by finding unconventional solutions to overlooked problems.