051: Charles Hudson - Funding the Forgotten Founder
Mindful Money
The Challenges of Venture Capital
There are a lot of challenges in the venture capital model. One of the big challenges without getting too far in the weeds is we've seen some businesses that generate a ton of cash. They don't want to go public, and we've started having other large private investment firms say, we'd like to come buy that business from you. Those, those companies always have options.
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Charles Hudson is the Founder and Managing Partner of Precursor Ventures, and early-stage venture capital firm focused on investing in the first institutional round of investments for the most promising software and hardware companies.
Today, Charles joins the show to discuss the work he does as a venture capital investor, his philosophy of investing in diverse founders with a variety of ideas, and traits he looks for in an attractive investment. Charles explains the landscape of venture capital, shares the value that Precursor Ventures provides to founders, and discusses his passion for helping entrepreneurs scale and grow their businesses.
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Key Takeaways
00:49 – Jonathan introduces today’s guest, Charles Hudson, who joins the show to share early jobs he had as a kid, where he caught the entrepreneurial bug and
08:41 – Building wealth through building a business
11:40 – Charles’ career arc
14:35 – The importance of finding impactful mentors in our increasingly remote society
17:59 – Charles explains the landscape of venture capital
21:38 – Traits of a great venture capital investment
23:36 – The importance of investing in diverse founders and what it means to Charles
29:29 – The value that Precursor Ventures provides to founders
33:41 – Providing resources to the ‘forgotten founder’ and the question Charles asks himself when considering an investment
42:27 – One piece of entrepreneurial advice to heed and one thing to completely ignore when seeking funding
46:12 – One thing Charles would like others to know about him and one place Charles has visited that had a profound impact on him
49:13 – Jonathan thanks Charles for joining the show today and lets listeners know where to connect with him
Tweetable Quotes
“My mom owned her own law practice. For her, I think it was more about flexibility. She would say, ‘I get to set my own hours. They’re long, but I get to set them. I get to choose my own clients. I get to set my own rate.’ And, I think for her, it was really important to have that level of control. For me, the big ‘Ah-Ha’ was that I met business owners and realized, ‘Oh, so that’s how you do it.’” (09:31) (Charles)
“After five years I realized, in the end, the thing that really got me excited was not investing big checks into companies that had really experienced management teams and repeat founders. The thing that got me excited was really working with less experienced, first-time founders where the money and advice really made a difference. This is a harder way to make money, but it’s way more satisfying and way more engaging for me. And if I’m gonna do something professionally, I want it to meet my needs in that dimension.” (13:56) (Charles)
“I think we will eventually get to a place where remote and distributed culture is well understood and the norms and practices of including people are better. But right now we’re not there, in my opinion.” (16:42) (Charles)
“So, I would say - at broad strokes - the job of a venture capitalist is to find really good private companies, invest money, provide some level of support, and help those companies grow and scale.” (18:09) (Charles)
“One big thing I’ve learned is the easiest thing to do in venture capital is to simply invest in your friends, the people that you know well. It’s a low regrets framework. Presumably, if you’ve been successful, your friends have also been successful too.” (24:04) (Charles)
“A significant value in what we do for founders is not telling them what to do or giving them advice, but connecting them with peers who have solved that problem recently.” (30:04) (Charles)
“If you don’t have the right level of competitive dynamic around your investment, work harder to create that environment as opposed to lying.” (45:40) (Charles)
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