Transcription
Find something outside of work that is your own practice that requires buy-in from no one else and that you love, and don't give it up because it is so hard. It is so hard to grow in this role. It is hard to get your first role, but to get to be a partner, you have to have an incredibly long-term, um, an a capacity to work at an extremely high output for a very long time because it happens slowly.
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Hi everyone, welcome back to the Play Bridge podcast. Today, we are joined by Kate McAndrew. She is the co-founder and general partner at Bounous, a collective of creative technologists advancing the art of building companies. She leads pre-seed rounds investing out of their $100 million inaugural fund. Prior to starting Bounous, Kate was investing at Bolt for eight years and has invested in over 70 companies at the concept stage. Kate is also the founder of Women in Hardware and the co-author of The Goddess Guide to Branding. So, you're up to so many different awesome things. Really excited to have you on the show today.
I'm so delighted to be here. Thanks for having me on, Ruffin.
So, want to kick it off. You've worked in VC for nearly a decade. Would love to just start it off by learning a bit more about why you wanted to work in venture capital in the first place and how you first got your foot in the door.
Yeah, so I actually have been in VC for 12 years now. Um, before I started at Bolt, I ran an accelerator for two years. That's kind of how I got into it. Um, and that was 100% on accident, which is the worst thing for people who like want to get into VC and you're like, "Give me advice," and you're like, "Honestly, it was an accident." But the reason I got into it was I knew I wanted to start something, and I didn't have, you know, a hundred grand for an MBA. And I was thinking about, you know, "Should I go to business school? What's the ROI on that?" And I met some angel investors who wanted to start an accelerator program, and they told me what an accelerator was, and it completely blew my mind. I, um, was just floored by the fact that, you know, that someone would give a founder money, or I didn't even know the word founder at the time, would give an entrepreneur money and then help them start their business. I was really stuck in this paradigm of like, "I have to go hand someone money to learn how to do that." And so I was just like, "I don't know what this thing is, but like I want to go be a part of that." And I got to start this accelerator, do my first 20 deals. So I got to really like make investment decisions and write small checks there, $25k checks. One of those companies was based in San Francisco, and I came to visit them. They were all living in a big warehouse community in Soma. And I came for the weekend, and I was just like, "This is where I need to be." You know, like the energy was insane. I think they gave me like an ounce of mushrooms and went for a hike on Twin Peaks. I was just like, "I'm sold." So I moved to San Francisco, you know, with like a U-Haul. They, that founder falsified an employment letter for me so I could qualify for my first apartment in San Francisco. And, um, I just started hustling, like looking for, looking for jobs. And I landed an associate job at a brand new firm called Bolt. They hadn't even raised their first fund yet. So they took a flyer on me, I took a flyer on them, and the rest is history.
Wait, did I see that you were in either South or North Carolina before?
Yeah, so I actually grew up in Los Angeles and then I went to McGill University in Montreal for college. But I moved to a small town in North Carolina to do a year of service with Habitat for Humanity, uh, building houses. And that was actually how I met the angel investors, which is like the weirdest place to meet angel investors. They were volunteers.
I'm from North Carolina, so it's like so unique to see people from the South even, like, figure out how to tap into this space because it's like, I didn't know what tech or venture capital was until I literally moved to LA, like, and was much older and later in life.
Totally. And I, like, I grew up in LA and I actually was actually running a consulting practice in LA after college, and I still had never heard the word founder or VC or any of that, right? Like, I was always a hustler. Like, I ran like a bunch of different boot-strap companies in high school and college, but that whole world of like finance meeting companies was not something I was familiar with at all. And so that's why this, um, concept was so revolutionary to me. And at that time, like YC was a few years old, Techstars was getting going, and there was really this push for second and third tier cities to do community development and, um, kind of build like their own little tech hubs. And there was a lot of government money for that. So that was one of the bases for the funding. But I left the South fairly quickly, in large part because it was very clear to me that like the person that who, like, who I was was not going to be successful in business in the South. I am like, and opinionated, hard-driving, like ambitious feminist woman. And while I'm very grateful that I got my start there, like what I, um, knew would, or like the people that I knew would team up with me to build things of the impact and scale that I wanted were not in the South.
Back to your point of like learning what an accelerator is, for people listening that might not know, can you explain kind of what an accelerator is and how it works?
Yeah, so accelerators are programs that are, um, essentially set up to invest small amounts of money into brand new startups and then put them through usually a set number of months of training in a cohort that kind of puts you in this class of other founders who are trying to build their companies and helps you network, helps you put together your pitch deck, helps you think through key strategic decisions. There's really only one accelerator that's ever driven good returns, though, and that's YC. So people know YC and there's a reason for that. Most accelerators actually don't have good return profiles. However, if you're wanting to get into VC, that's a great place to look for your first venture job. It kind of gets you in the mix. So, um, they've become less popular in the last eight years, I would say, um, for like high-quality founders. But, um, but that's what an accelerator is.
Do you think it's worth founders considering the accelerator path outside of YC, or do you think like, are you against that as an investor?
I think the top founders right now are raising institutional pre-seed rounds. That means they're coming out of the gate and they're raising one to three million from institutional investors and angels like myself. Now, that said, that's a population that typically has a network, right? They have access to that network and that capital. And that doesn't mean they have to have gone to Stanford or Harvard, but they're sort of in like a particular cream of the crop, right? That's a top single-digit percentage of people that want to start a venture. I think if you, um, if you're struggling to raise from institutional money, an accelerator can be a decent place to go, but many of them take a lot of equity. So I would look at what the deal is, um, because you might be able to get that same amount of money from angel investors and then really hustle to build your network and find that you're going to get the same result while selling less of your business upfront.
Okay, so moving on to your role at Bolt. Tell us like what the fund focus was, what you were first brought in to do, and then how your role evolved over the years.
Bolt was a firm focused on building companies at the intersection of hardware and software. And, um, we only did pre-seed. And I've stayed investing in pre-seed. So we only did pre-seed, and it was about 50/50 enterprise and consumer. So over the eight years that I was there, I touched everything from, you know, consumer hardware to space launching systems to digital health. So I really got to see a lot. But the common thread was that there was a physical product enabling that business. Um, so some examples, like we were the first investor in Tonal, which is an at-home fitness company. We were the first investors in Desktop Metal, which went public for over a billion dollars. We also the first investors in a biotech company that also went public for over a billion dollars. So we really did a lot of things across the economy, but they all shared, um, this kind of hardware or physical product heritage. I was hired as an associate when Bolt had like no brand, no presence on the West Coast, and I didn't even know what really was to be an associate, you know? Was just like, "This year is cool, like let's go." And so, um, the number one thing that any associate needs to do is drive quality pipeline. And, you know, each, each tier in your investing career, associate, principal, partner, general partner, they each have key deliverables. And the key deliverable of any associate is driving quality deal flow. If you can't do that, you will not progress to the next level. And you also have to keep doing that your whole career. Even as you gain more experience, you have to continue to drive quality pipeline. So as an associate, that was my number one thing that I had to do. Now, at the same time, we were also a startup, right? This was a brand new fund, and so we were also building the brand. Like, I tiled the bathroom in our first office over the weekend. Like, you know, it was really like I had an owner's mentality with that business. And for me, that made it so much more fun. I think if I had started it in Andreessen Horowitz or something like that, I would have left. I don't think it would have been like interesting enough to me because I love company building. And I really got to both grow as an investor at Bolt, but really also get to see what it takes to build a venture capital firm, which obviously now I'm doing with Bounous. So, so yeah, so I started as an associate and, um, and my job was to bring quality deals to the pipeline and get them done. And that continues to be every VC's biggest problem and biggest pleasure, you know, no matter how senior you get in your career.
Yeah, what especially when you're like first getting started, how did you build that from scratch and bring in quality deals? And maybe how would you think about it differently in like a market like today?
The first thing that I did was just try to meet everyone. So one of the things that was really great about Bolt was we were focused on hardware and software, right? And so that kind of narrowed the pool of who I needed to know. And so I basically started with my friends and like my colleagues who were all based in Boston, and I was like, "Who are the three smartest people in hardware that you know that I should be talking to?" And, you know, I was probably doing networking meetings from 7:00 AM to 10:00 PM, five days a week. Like, I worked my ass off. And every breakfast, lunch, dinner, drinks, like I was just out there meeting everyone. I was in an event four days a week at night. I started hosting events very quickly. And so for me, it was really about like getting to know the people. And ultimately, the network that I built became my biggest champions, my biggest source of deal flow, and also like some of my closest friends. And so I really took a network-driven approach to building that deal pipeline. And I was good at it, right? Like that worked for me. But contrast, I was working side by side with another associate in Boston, and he had a really different strategy. He was really good at sourcing online. And so together, we were an amazing pair, right? Because he was really good at like being on Twitter. I was like, "I [expletive] hate Twitter." And so we were, we were kind of fishing on in different tools, you know? But and we also just totally had each other's backs. We also built a bunch of events. Like we started something called Hardware Workshop, which we ran three times a year with, um, a founder of a hardware company. And we got, you know, all the other hardware VCs and other kind of like service providers in that ecosystem. And started really a workshop to share what we knew with founders. That became a huge source of deal flow for us. So it was really also seeing like, "What does the community need?" and then "How can we offer that authentically?" Um, and in doing that, you just meet good people. They, they see that you want to do good work, and like positive connections happen. So we put a lot of energy into events too.
And how did you think about and how did you navigate going from an associate to partner at the firm? Because I think that's like definitely something early VCs are always thinking about, like, "How do I build the like long-term career path out of a new fund?"
So four things around navigating promotions in VC. The first thing is a piece of advice that was passed to me by a female partner at Andreessen Horowitz in my first year, and it is probably the best piece of advice that I got. So I want to pay it forward. And that is: find something outside of work that is your own practice that requires buy-in from no one else and that you love. And don't give it up because it is so hard. It is so hard to grow in this role. It is hard to get your first role, but to get to be a partner, you have to have an incredibly long-term, um, an a capacity to work at an extremely high output for a very long time because it happens slowly. And so I think that that piece of advice really served me. For me, it was dance, right? Like I, I have a dance practice, and it's both like a physical practice and a creative practice. And that's like, that was like my non-negotiable, right? And nobody at the dance studio has any idea what I do for a living. Like that's just mine. So find something that's just yours. Commit to it. That's like number one. Number two, focus on the key deliverable of your role and on responsibilities of the next role until you've aced the ones of your current role. A lot of people who start out in associate roles want to try and add value to portfolio companies because they think that's what it gets, that's what's going to get them the promotion. Don't do that. If you're an associate and you're still less than three years into your journey, the only thing you should be doing is activities that drive pipeline because that's what you're getting measured on. Once you have proven that you can drive quality pipeline and you've learned what that really means for your firm, which by the way, it takes years, it takes years, then you can start to think about delivering things for the portfolio companies. But really take it one step at a time. So focus on the key deliverable of your role. Number three, act like an owner. Right? Venture firms are partnerships, they're not operating companies. So if you want to be on the partner track, you need to act like you own that business. Which means no task is too small. Taking out the trash, tiling the bathroom, like I mentioned, like you need to think about how would I act if I owned this business? And by the way, if you have carry, you actually do. Right? And if you don't have carry, that's another discussion. But if you're investing, you should have carry. There, four, you are an owner, so act like an owner. So number four is, and this is so important, build relationships. Get FaceTime in person with the senior partners at your firm. If there is an office, get in it. If you work remotely, get on a plane. You need to build relationships. Again, these are partnerships, and this is not like decisions about promotions. Decisions about, um, how you're going to move up in the world are not based on quantitative, easily, easily measurable, like arms-length transactions. They're based on what you, but they're also based on like, how do you gel with the team? And so much of this business is driven via apprenticeship. And VCs are notoriously terrible managers. They're not going to come to you and sit you down and give you an hour-long one-on-one, you know, each week to like teach you what you need to know. You got to go get in their face, get a drink with them, and pull it out of them. And if you do that, you have the chance of building like a true partnership and really having them see you as someone that belongs at that table. So those are four pieces of advice.
All amazing. And I feel like just working in VC, one, it's so difficult to break in, but then it's so difficult to also navigate working in VC once you're in. It's such like a unique job, to your point, it's like I feel like nothing else. So all super powerful, important advice. So thank you for sharing.
Did you have mentors like outside of your firm, or did you kind of rely mostly on advice, advice, and mentorship from within your firm?
So I was very lucky in that at Bolt, there was a senior partner who's now my equal partner at Bounous. We've been working together for 10 years now. He's, his first company. Yeah, he's amazing. He's like, if I'm ever like stuck in a tie, pron, like he's who I'm calling. Like he's like that level of like, but, but like I, I always have, I do that exercise of like, so if I'm at a tie, pron, who am I calling? Like, like Axel is who I call. So he sold his first company out of MIT in the '80s, and he's been a VC since the '90s. And so I was very lucky to be in a small firm with a senior partner and, um, and really like learn, learn from him. And the best thing I ever did was to ignore everyone's advice and listen to him. Honestly, if I had listened to other people's advice, I would have changed firms. I would have like pushed in a way that I shouldn't have pushed. And like, I really decided to trust my team, and it was the right call. Now, not everybody is Axel, right? Like he is an N of one, he's very special. But I chose to trust my team. And the truth is that in VC, every firm is like a unique sea pony, you know? And so the advice of what works for someone at one firm could blow up your opportunities to grow in another firm because the culture can be so divergent. And Bolt's culture was very different than most VC funds. So I think that like trusting him, and by the way, his biggest advice to me was, "You're doing great. Stop worrying so much and keep going." Like, I considered leaving to go get my MBA because I was like, "Well, shouldn't I have an MBA?" And he was like, "Are you kidding me? Most people with an MBA would be would be dying to get this job. Like, keep going. Go get an accounting book at the library." And I was like, "Okay." Like, so that was, yeah, definitely ignoring other people's advice was the best thing that I ever did for my career.
And so how did you and Axel eventually decide to go out and launch your own firm?
So there was a generational shift that was happening at Bolt, and we had two partners that were leaving venture. Axel was the GP that wanted to stay, and he kind of looked at me and he was like, "So, do you want to do this thing?" And I was like, "With you? Definitely." But yeah, like, I mean, to me, it was like, there was no, it took about five seconds, um, and it was so obvious to me. But the second piece of it was, I knew I didn't want it to be Bolt. Like, I had developed investment theses while I was at Bolt that were kind of outside of Bolt's core, um, thesis area, to be honest. And I also knew that the Bolt LPs had signed up to back not me, right? So there were two other principals, I was a partner at the time, but there were two other folks at Bolt who were in junior investing roles who were kind of ready to rise up to the next level. I was really ready to like be in the GP seat. And we all decided, there's four of us now, we all kind of looked around and we were like, "Do we want to do this together? And if we want to do it, what do we want it to be?" And that's how Bounous was born. And so it was really, for me, like a desire to build a firm that I felt like expressed my truest held beliefs about, you know, what needs to exist in this world. And a desire to raise that money from my own LPs, you know, on my own thesis, and really do it for myself, having all the amazing lessons that I learned at Bolt. And so I was just ready to kind of take that risk on myself. And, um, and it's really paid off.
Before we dive into your investment thesis, because definitely want to hear more about that, would love to hear more about like some of the deals you did in your decade of investing experience. Like, what were some of the big winners? What were some of the big losers? And what did you learn from both?
I sourced probably half, roughly half of the portfolio at Bolt. So, like, I sourced, I sourced a lot of the deals. Um, so I'll speak to, but I'll speak to the ones that were my favorite. Like, maybe speak to one that was my favorite. So, um, I wrote a thesis around direct-to-consumer that was definitely adjacent to what we were doing at Bolt, but it was informed by what I was learning around these investments. And the first two deals that I did out of that thesis are some of the most successful, like, are just very successful companies in that portfolio. One of them is Bobbie, baby, which is an infant formula company. I led their pre-seed round, and I'm still on the board there. They're, you know, we're doing hundreds of millions of revenue, we're profitable, and it's, to me, it's really a culture-shifting brand. I'm extremely proud of that company.
What did their pitch look like when you, like, first met that team? And how did you even meet the founder?
So when I met Bobbie, it was Laura Modi, solo founder. She was eight months pregnant with her second child, and she had a pitch deck, and that's it. So it was pre-product, pre-revenue, solo founder. And I remember the moment where I, where I got to yes. And she had invited me to what she called a feeding circle at her house. And she had invited a group of 10 women who had been through the process of going back to work while trying to breastfeed. And I sat in on it. It was really a user group, right? And I sat in on that user group, and I saw these women talking about the double bind that they were in, trying to breastfeed their babies, which takes over 30 hours a week, and trying to go back to work, their high-powered tech jobs, and the shame that they felt around feeding formula to their kids, both because they felt like there weren't good products in the US and just because of the cultural narrative around what does it mean to be a good mother. Um, and in that moment, what Laura did is she allowed me to see the emotional opportunity of the brand. She communicated the brand potential by sitting me in a room with these users. And I wasn't a mom at the time, although my baby was one of the first Bobbie babies, which is amazing. So, so my baby was like one of the first babies to drink, drink the product.
That's so cool.
But at the time, I wasn't a mom. I wasn't pregnant. And so she communicated the brand opportunity. And then I looked at the underlying behavior. And this is one of my favorite things today. Like, Bobbie, the infant formula market is dominated by three pharmaceutical players. Those pharmaceutical players had not updated their formulations since the '80s. Wow. Because our regulations hadn't been updated. So the majority of formula in the US is full of corn syrup, right? And so what was happening was people were importing formula illegally from, um, from Europe and buying it like out of people's trunks on the black market because they wanted a better product for their kids. And so for me, this is like an amazing opportunity to disrupt something with a formulation that's better, a brand that's speaking to like the hearts and minds of parents today, and then some underlying economics that are super attractive, right? So formula has a known LTV. Once you acquire that customer, that child is going to drink the same formula. You don't, you don't, you don't change formulas. So that's very attractive from a CLTV standpoint. And there were also no direct-to-consumer options on the market. So we were the first one to go direct-to-consumer and offer parents a subscription in a category where convenience really matters. So there were a lot of things about the setup that, um, that ended up being very powerful drivers for the business, and it's one of the reasons it's successful today. But the thing that made me say yes was that, was that feeding circle. And I think that showed really the genius of, of Laura. And man, Laura is a force. Like she is a force. I learn from her every day.
So amazing. And then what about, like, on the flip side? No need to like name any companies or names, but like, what have you observed over your years of investing of like, "This might be like a red flag when I'm looking at a pre-seed deal these days?"
So a company that I passed on, this was a, this was a huge lesson in my investing career. Like, like I remember, I remember this so well. So I, I was one of the first investors to see Mirror, which sold to Lululemon for $500 million. Wow. And we had invested, we were the first check in Tonal, which, you know, is in the at-home fitness space, very similar business model. And so I got, you know, I got a ping from Bren. I was running a Women in Hardware network at the time, so I think she found me through that. But I was one of the first investors to see Mirror. And I really loved her. And I was like, "I think this is interesting. I think it's a different segment than Tonal." But more than anything, like, I think she really knows her customer. And a colleague of mine, who shall not be named, got on a call and was like asking her all of these technical questions. And she was also a solo founder, by the way. Was asking her all of these technical questions and came away from that call with this assessment that like she didn't really know what she was talking about. And at the time, I like didn't have the juice in the partnership. Like I was too junior to just be like, "No, no, we should just do it." Right? Like, I think I was a year and a half into my investing career. But I also just didn't have the self-confidence to know what I was seeing, right? And what I was seeing was founder-market fit. And there's always a million reasons to say no to something, like, but the thing that you have to do as an investor is you have to find your yes. And for me, like a CEO in consumer, especially a CEO who knows their customer better than anyone else with incredible nuance, who's also incredibly driven, like that, that's that's a special thing to find. And she had it, right? So this was like a lesson that I have taken with me now. And there are times when I come out of a meeting or like in a partnership conversation, I'm like, "I think she might be a Bren." Like, "I think like I missed that deal. I shouldn't have done it." So that's like, I, I really learned from that experience. Um, yeah, so that's something that I, I, I think about a lot.
Amazing. Two follow-ups. One, like, in what ways were you seeing founder-market fit at that time with Bren? And then two, like, as for someone that might be an associate and is like thinking about how do I pitch this company to my investment committee or to my partners, like, what advice do you have on building confidence for that and how you should frame that?
So, Mark, on founder-market fit, Bren had bootstrapped her own fitness company in New York that was basically doing what Mirror was doing in a class capacity. So she had been working day in and day out with exactly her target customer and talking, like working out with them, talking to them about their workout habits, like she just knew this customer so well from that bootstrapped business. And she knew she wanted to build something that would scale, right? So what, like that was the experience. But the other thing was like, I, with founders, like spotting a great founder, I'm always looking for outlier traits. So Bren had also been a professional ballet dancer and gone to Harvard. Very rare, right? People like, I love like an ultra marathoner or professional ballet dancer, like someone who has achieved something phenomenal in their life, performed at the highest level, they tend to continue to perform at the highest level. So that was a little like ding, ding, ding, ding, ding. Like, I don't know that I, that I knew how to like talk about it at that time, but now that would be like the first one of the first things on my deal sheet. Um, so yeah, those are the two things. Uh, oh, and the other is like, that it was, to me, very, um, insightful. So founder-market fit and also just ambition, which is something that we look for. So she had done this sort of unscalable thing with these studios, and she was like, "I know that what this customer wants, and I want to do something that's going to scale." And so she was really thinking about designing the product experience around something that was venture-scale and thinking about it from that perspective, which is again, the mark of like, a very thoughtful founder.
So second question, if you're an associate and you're in one of these situations and you have something that like, "I think this is interesting," but I'm getting pushed back, like, that's a very difficult situation, especially when you're junior. And so I think you got to break it down to like, what's the heart of any great deal? The heart of any great deal is how strong is the founder and how big is the market? Everything else is irrelevant. So I would key into how does my firm make decisions around founder quality? Do they listen to references? Do they listen to trusted advisors? Do they look for certain kinds of accomplishments in their past? What's the profile of founders that we backed? And how might this founder's profile map to that? So listen to the ways that the partners are talking about founder quality and see if you can communicate around this founder's attributes within that framework. And then the second is market opportunity. How big is the market? And I'm not talking about like some 30-page report off of some analyst's desk, right? That's like not that relevant. What's the bottoms-up analysis? How is this founder talking about the size of their addition? Because everything is irrelevant except for the quality of that founder and the size of that market and their ability to uniquely go after it. Everything else is in the noise.
Now, I would love to hear more about what you're building with Bounous and your investment strategy there and kind of like how your years of investing experience have really informed your new or evolved investment thesis.
I am just like so in love with what we're doing at Bounous. It's awesome. And it's amazing to see it go from a theoretical thing, you know, a year and a half ago, to something that's living and breathing. We just closed deal number 17. Term sheet number 18 is out right now, and I'm hoping it's going to. So feeling very excited about that. So first and foremost, we are a collective. So there are four partners who make all investment decisions, but we have a collective of 100 people that kind of comprise Bounous. And that includes our portfolio founders, um, some of our LPs, as well as, um, kind of key subject matter experts, um, who are really, I think, kind of redefining our disciplines, everything from IP to material science, kind of all the way across the board. So we have a core mission to advance the art of building companies. And everything that we do ladders up to that. Um, and so investing is kind of how we enter the world and put that into practice. But there's all kinds of other things that we do around that that are really important to me, like we run, um, study groups, which are these six-week sprints, um, around new areas of inquiry and interest for us. We just finished one on mycelium, which was fascinating, um, and I can, we have a report that we did that's like 83 pages long about everything that we learned about mycelium, from psychedelic medicine to, wow, alternative materials, to, um, like we spoke to ethno botanists, you know, we really, like, did a whole tour de force on that topic. Um, we're about to kick one off around CAD and artificial intelligence. So computer-aided design and artificial intelligence. That's starting next week. So we really believe in like learning together, building together, um, and advancing the art and practice of building products, teams, companies, um, as a, as a modus, like a reason for being at, at Bounous. So that's our goal. And then we raised this $100 million fund to really have capital to deploy against that mission. So we're investing at the frontiers of technology and design, uh, because we think that one, we just love it. Like, we're so deeply passionate about the spaces where technology and design come together, both from like how maybe people traditionally think about design, like computer-aided design or graphic design or brand design or design-led teams, but also kind of how we redesign problems, redesign markets, redesign businesses. So really that design thinking approach, and then like the enabling technologies underneath that are creating like big waves of opportunity and change. So, um, practically in the fund, you know, if I look at the first 17 deals, there's definitely a concentration in AI and design coming together. Definitely a concentration around climate technology, um, and, uh, then some, I would say, platforms that are trying to re-architect, kind of platforms that are trying to re-architecting more equitable. Um, so that's like another kind of area of interest of mine. So those are of the three concentrations, but we look quite broadly, um, in that space. We're very high conviction in what we do. Many pre-seed investors are writing fairly, you know, small, small checks. Like most pre-seed funds are doing maybe $250k. Individuals might be like $25k to $100k. In our investments, our average check size is $1.4 million right now. And this is in companies that are pre-product, pre-revenue, you know, right? So we really specialize in zero to product-market fit. Um, we lead pretty much every deal that we do. We've led 90% of the deals that we're that we're in. And, um, we're investing quite a lot of capital so that we can also invest the time, right? So it's a relatively small portfolio for pre-seed. We'll do kind of mid-30s, like being 34 deals is what's modeled. Um, and we want to spend a lot of time with those founders. So we're taking board seats, usually from kind of when we invest through Series A. And we really believe that this pre-seed phase, like is a phase that's worth specializing in. Like it is my practice. I've spent my whole career investing at this stage. This is not a stepping stone to like a billion-dollar Series A fund. Like that's not, I'm not interested in that. Like my partners and I absolutely love the art and craft of of this phase and really helping founders get it right. So that's what we're focused on right now.
Yeah, and do you want to shout out maybe one or two companies that have that are in your portfolio? Most of them you won't have heard of because they're still super early, but I can kind of describe a couple of them to also give you a flavor for what we're investing in. So one, um, one company is in the EV charging space. It's called Orange, and they do EV charging for multi-tenant apartment buildings. Uh, another one is called Dig, uh, which is in the geothermal space. I'm on the board of that. When it's a residential geothermal company, U making geothermal energy affordable for homeowners. Um, another one is Binder. I'm so obsessed with Binder. I think Ruffin and you actually met met them. So they're helping, like book influencers become publishers. So really reimagining the whole publishing industry around the people who are truly driving book sales today, which are book influencers. That's what I'm on the board of. There's like three companies that that I'm working with that I love.
Well, on the topic of publishing books, from your investment in Binder, you've also written a book, and it's coming out in the fall, which is incredible. I literally don't know how you do all of this and write a book. So one, tell us like what goes into creating and publishing a book, and like, give us the highlights of what we can expect from your book.
Well, it's so interesting because I actually met Binder in the process of writing this book. Talking to, yeah, like I was talking to everyone that I knew about like, "Who do I know who knows anything about publishing a book?" Um, and so it was in those conversations that I like met the people who eventually introduced me to Binder. But I really learned how broken publishing is. So it was like, I experienced it firsthand, and then I, I met them, and I was like, "Oh my God, I get this." Like, publishing is broken. And you hear this abstractly, but until you really lived it yourself, it's hard to really connect with that, you know? So it was kind of, yeah, kind of awesome. But I wrote the book with my sister, actually, which has been an incredible project for us. My sister is a brand strategist. She's been in brand strategy for 15 years. I'm a VC and I've done a lot of consumer and like brand-led investing. And we came together to write this book. And my sister and I share a mission in this life, which is to elevate the archetypal feminine at work. It's something that we talk a lot about. And our work is really different, but we were on the shared mission. And so the book is called The Goddess Guide to Branding. And it is a workbook that walks founders, or dreaming founders, through the process of how to find a core archetype for their brand, and then how to build a brand blueprint that comes out of that archetype that you could take that blueprint to any branding agency or Upwork designer to kind of start, um, realizing your brand vision. So if you're a bootstrapped founder, it's relevant for you. If you're a venture-backed founder, it's relevant for you. And the system that underpins the book, um, is actually a take on the archetypal branding systems that have existed for a long time that are all very masculine and patriarchal. So the most common one is Carl Jung's kind of big 12. It's like the Innovator, the Explorer. And essentially, the only two feminine archetypes in that system are like the Mother and the [expletive], essentially. So it's like, really not expansive. And people say that they're genderless, but they're not. And we actually came across the work of a Jungian analyst named Jean Shinoda Bolen, who wrote a book in the '80s called Goddesses in Everywoman. And it's really a feminist interpretation of Jung's work. And we used that as the basis for a branding system that's all based on the expansiveness of the archetypal feminine. So in the book, you meet eight goddesses. You meet Diana, the Free Spirit. And you talk to, we talk to brand leaders and CEOs who are leading brands that express Diana. We talked to Athena, the Wise, like, we spoke to Sally Krawcheck, the CEO of Ellevest, um, around that, right? So we're talking to, and like Laura Modi's in the book, the CEO of Bobbie. So you meet the goddess, you hear about who she is, what she brings to her customers, and then we go through a case study of successful companies and successful brands that really show you what that, what that goddess can look like in action. And then we walk you through the process of finding the goddess for your brand and kind of going through how you're going to express that, that energy. Um, and so throughout the book, you get to hear from 22 female founders and brand experts. And it's honestly, it started out as a project between me and my sister, really wanting to put this offering out in the world. But the thing that made me just feel like, "Oh my God, I've got to get this out there" is it really is a collection of so much wisdom and knowledge from the women that I get to work with every day. Like, I just get to hang out with these women, but their genius is like not out there getting covered. And so it really became like this channeling force for all of their wisdom. And so, um, yeah, I'm so stoked to to have it come out. It's also just a really fun book. Like, you can read it. You don't need an MBA or a degree to read it. Like, you can just like crack into it and, um, find something generative and, and hopefully fun.
Amazing. Also just like so relevant. Like I find the power of like digital branding and creating a digital presence for yourself is like so incredible these days and has definitely opened up so many doors for myself. And I'm looking forward to reading and learning from like the Sally Krawchecks of the world. That's so cool.
Yeah, it's, I mean, it's like so fun. I, I can't wait for you to read the book. Like, I, I hope you love it. Um.
Where can people, like, can people pre-order it? Or how can people find the book?
Yes, it will be available for pre-orders on Amazon imminently. Actually, I think it's available now. So if you look, The Goddess Guide to Branding on Amazon, you'll find it. I, I think I Googled it and found it on Amazon. So yeah, so pre-order the book, um, and like share it with your friends. Like, we just want, we want everyone, especially women, but really everyone that, um, that is interested in elevating the archetypal feminine at work, that is interested in phenomenal branding, that is interested in a more abundant version of capitalism, to get their hands on this book and to get access to this knowledge and to share it with their friends.
Our dream. As we start to wrap things up, we'll end with two questions. The first that I ask every investor is, can you choose basically a VC term or a startup concept that you would like to debunk and explain to the audience?
So I want to talk about the difference between a handshake deal, a term sheet, and docs. Because those are three phrases that mean a lot to me and they mean specific things kind of within the industry, but it might not be obvious to to founders. So a handshake deal is typically something that you've done over the phone, maybe over email, where you've discussed the key terms of the deal, usually the amount of money the investor is going to put in, the cap, right, like how much, like what, what the cap is, so how much they're going to own, and then any, if there's going to be a board seat or not. Those are kind of the major pieces. And if you talk about those terms and you're like, "Yeah, I'm in." "Yes, that works for me." That's a handshake deal, right? It is considered very poor form to, um, to go back on a handshake deal.
or to take a handshake deal to another venture firm and try and get a competing offer. It's the kind of thing that can really hurt you in the long term. That doesn't mean you can't negotiate around aspects of the docs, but like, that's what a handshake deal is. There's no term sheet, there's no, um, docs.
By contrast, a term sheet is a document that a lawyer writes up, you or venture firm with their lawyer. It's usually one to two pages long and it's going to enumerate the key legal terms of the docs. That includes what I just mentioned, the pricey amount of money, the board seat, but also things like pro rata rights or the investor's right to continue to invest in your business and other terms like that. So it's a pretty comprehensive list of the key business terms. That's a term sheet. If you sign that term sheet, that's also like, once you've signed the term sheet, unless some, you find out that like, that VC was like a murderer or something, you know, I don't know, like something really bad where like, like you, you can't do the deal, like that's, that's, that's serious. That's serious. So that's what we're talking about with the level of, ex, seriousness with a, with a term sheet.
And then docs are just the process of making that agreed-upon term sheet come to life in legally binding language, right? So when you're negotiating around the key terms, you really want to do that negotiation at the term sheet level and then you want the lawyers to come together to draft documents that honor the term sheet. You don't want to reopen business points in the term sheet process. You really want to focus on the docs, um, the docs, like, you know, inking what you determined as fair and equitable at the term sheet level. So that's the difference between handshake, term sheet, and docs.
Thank you so much. And then can you share a female founder, investor, or leader who inspires you and a bit about why?
Yes, I like met her for the first time last month, which is funny. So it's Kirsten Green, who's the founder of Forerunner. And she started Forerunner about the same year I started in venture. And I've watched her on her journey. It is mind-blowing to me. You know, she started out, so her, like, I feel like she was where I am when I started. And watching her grow Forerunner into a billion-dollar fund. She started out in kind of like a narrow investment space and she has grown a force of an institutional fund. Um, and I don't think fund size necessarily correlates with success, but I do love seeing that she broke out of the emerging manager bucket. She put Forerunner on the map of as tier one VCs and she broke out of consumer. Like, Forerunner does consumer, but they also win in enterprise deals. So she really successfully evolved that brand into like a generalist tier one shop. And that is so hard. I can't name another brand that's done it in the last 10 years. And I love that it was founded by a woman. So I'm a huge fan of Kirsten Green. I met her at Equity Summit and like got to hang out with her at the airport. I, she doesn't know that I'm like her biggest fan. I tried to play it cool, but I think she has a lot of very big fans. So, oh yeah, like I, like I'm gonna send her my book, you know, like I, I, I'm a huge fan of hers. And let me tell you, like the thing that also sometimes they say, don't meet your heroes. In the case of Kirsten Green, meet your heroes. Like we spent an hour talking about investing in life and she was fully tuned in. She was fully tuned in to like what's happening with me, how can support me, while also not being like, oh, I'm Kirsten Green and I figured it all out, right? She was talking about what are her challenges today and how can I, you know, I was like, how can I help you? Right? Every relationship like that has to flow two ways. That's how great mentor-mentee relationships happen, right? Like, and this industry is, is truly like a community, right? And so when you find people that you respect and and like think highly of, like it's just wonderful to send them their very best deals. So like, I, I, I have a short list of people who I love investing with. They always get my best deals and they always send me their best deals. And that, that is really how this industry works.
Well, thank you so much for sharing that story. I would also be majorly fangirling if I met her. So, so cool.
It was great. Yeah. And then finally, where can people find you and where can people find Balons?
So I am on TikTok at Kate McAndrew and I'm also on LinkedIn at Kate Preston McAndrew. Those are great places to follow along. Um, Balons, you can find us at balons.co. That's our website. Um, if you want to pitch us, I read every single pitch that comes into our inbox. So you can pitch us at pitch@balons.co or follow us on LinkedIn or Instagram.
Well, thank you so much for joining and it was so fun getting to learn a little bit more about your career story and what you're up to now.
Absolutely. Thanks for having me.