Interviews
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Hunter Walk on Misconceptions about Seed Investing, Appreciating the Journey, and Late Nights with Conan O’Brien

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The Homebrew Computer Club is a well-known group of tech enthusiasts who met on the Stanford campus to talk about schematics, programming, and computers. It’s where Steve Jobs met Steve Wozniak, and it served as a starting point for many successful Silicon Valley founders.

As IPOs and fundraising amounts dominate Bay Area headlines, the Homebrew Computer Club serves as a gentle reminder that this is an industry that got its start from people who really just like to tinker and share information with others.

The club also serves as inspiration for venture capital company, Homebrew. Not your average VC, its founders, Hunter Walk and Satya Patel, also believe deeply that sharing information freely and candidly is the key to helping startups in its portfolio move faster and scale bigger.

During one of Atrium’s recent fireside chats, Hunter shared some of the life lessons he’s learned throughout his own career, the biggest misconception about seed investing, and advice for founders in search of the right investors.

 

The three things he needs to say “yes” to any project

One of Hunter’s defining career decisions was made during his time at a liberal arts college. Having compressed his thesis and collegial responsibilities into one day a week, he spent his senior year working on the second season of Late Night with Conan O’Brien. Yet as he neared graduation, he thought he needed to go into a different direction.

At the time, going to a liberal arts college left you with three career options: teaching, banking, or consulting. With no interest in being a teacher or working in the banking industry, Hunter chose consulting. Though, after the initial training was over, it turned out he wasn’t interested in being a consultant longterm either. But learning that about himself help force a set of decisions resulting in a career in tech.

Looking back, Hunter has zero regrets about his career progression but given the chance, he would make one decision differently: he would have stayed longer on the set of Conan. The decision to leave the show and go into consulting was influenced by fear. Rather than doing what he loved, and believing that he could be good at it, he gripped too tightly onto what he thought he should be doing instead of what he wanted to be doing.

Founder tip: With this in mind, Hunter makes career decisions by evaluating three things and offers these considerations as food for thought for founders and innovators alike:

  • Is this a project you want on your tombstone? For himself, Hunter says every project needs to be personally relevant to him—something that he wants to associate his identity with.
  • Is this something you can make a unique impact on? For example, if another 100 people can do the job a little bit better, a little bit worse, or about the same, do you still want to do it? Or would you rather choose something where you are uniquely needed?
  • Do you have the ability to directly impact the curve? If you give maximum effort, can you see the difference you’re making in a few years? This is critical for Hunter in determining the value he can personally bring to a project.

 

The biggest misconception about seed investing

When it comes to seed investing, there are plenty of misconceptions on what’s important and what’s not. What does Hunter consider the biggest misconception to be? That every company is inherently either good or bad, and that all investors evaluate companies against this binary metric.

In reality, if you take ten great investors and introduce them to a bunch of wonderful companies, half of them are going to immediately say, “I don’t get it,” because it simply comes down to pattern match. Perhaps they like tall founders and you’re too short or they only invest in companies whose names end in an “e.” It sounds ridiculous because it is—their reason for saying no usually involves things that are out of your control.

The other half? Now that’s your pool—although not all of them are going to say yes either. But these are the investors who really get what you’re doing and what matters most to them are your risks. These risks could be you as a first-time founder, your lack of a technical co-founder, or any other perceived risk factor that your startup presents. You have to look for investors who are comfortable with the risks you bring to the table.

When you’re talking to investors, Hunter advises founders to mentally catalog the risks that each investor is comfortable with—and the ones they’re not—to better assuage any hesitations or fears. After all, this is a sales situation and to win their business, you have to accurately address their concerns.

Keep in mind that you can’t be all things to all people. Find investors who are comfortable with your risks. Those are the ones you can be honest with and lean into, and won’t freak out the first time one of your risks rears its ugly head.

Founder tip: At the end of the day, you need to keep money in the bank. However, don’t let this hold you back from striving for a better class of investor—someone who wants to hold equity in your company and support you as a person.

 

Narrow the path to conviction

In Silicon Valley, cynicism and money go hand in hand. If a CEO’s job is to get money in the bank, there’s a tendency to not care about where it comes from. Sometimes just getting a check is perfectly fine for founders; sometimes founders need more.

If you’re a founder looking for more than just pure financial support, think about what you need to figure out from the point at which you meet someone to the point at which they want to make an investment in your company. Hunter says the answer often lies in how you qualify your investors.

He advises founders to evaluate their potential investors by understanding their behavior, their level of risk aversion, and their process.

  • Understand their behavior. A bit of a no-brainer, reference-check every interested investor and talk to people and founders who have worked with them closely.
  • Understand the risks that they’re comfortable with. Look for someone who not only understands your business but is also comfortable with its risks and the way you want to build it.
  • Understand their process. From a pure process perspective, especially if you’re talking to someone who might want to be a lead investor, help them narrow down the major considerations.
    • Create a list of items that you think the right lead investor needs to be comfortable with. During the initial conversation, make sure you answer all of their questions and ask where you can provide more clarification.
    • If you get a request for another meeting, make the best use of their time by asking them in advance about their remaining questions or the areas of your business they’re still trying to figure out.

Founder tip: By narrowing the path to conviction, you’re guiding someone to think about and answer questions as your investor. You’re helping them figure out what they need to understand about your business to get to the point where they’re going to write you a check. Everything else is just smiles and handshakes.

 

Hunter’s final thoughts

Hindsight is 20/20. When Hunter was twenty-seven, he felt incredibly tense about the possibilities of his career not shaking out the way he wanted it to. He had a fear that happiness breeds complacency and, as such, he worked nonstop and kept a bottle of whiskey and a bottle of Mylanta at his desk.

Looking back, he wishes he spent more time appreciating each step in his career. If you zoom into every company with a seemingly straight trajectory to the top, even the straightest of lines reveal a pattern of fluctuations.

Don’t forget to appreciate how lucky you are to be working on something you truly care about, alongside people you enjoy working with. Silicon Valley rewards people for working on hard problems with smart people. If Hunter could give one piece of advice to every founder, it would be to appreciate the journey they’re on and not just the destination.

 

To hear more from Hunter, listen to the full fireside chat.

 

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Cassie Pallesen is Atrium's Head of Corporate Marketing. Before Atrium, Cassie built and led Anaplan's global content team as well as held marketing roles at Autodesk and Bluewolf (an IBM company). Cassie is a well-rounded marketer with experience in website & content strategy, marketing communications, product marketing, demand generation, and content development.

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