The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: David Tisch on Why Ownership in Venture Does Not Matter, His Biggest Investing Misses and Hits and How His Investing Style Changed as a Result & 3 Core Reasons VCs Pass That Do Not Make Sense

May 4, 2021

David Tisch, Founder and Managing Partner of Box Group, shares his insights on venture capital and the evolution of seed funding. He challenges traditional ownership expectations in VC, arguing they reflect VCs' fears rather than founder needs. David discusses the growing trend of pre-emptive funding rounds, advising founders on how to evaluate their importance to investors. He reflects on his biggest misses and successes, emphasizing the need for adaptability and open-mindedness in investment strategies.

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INSIGHT

Evolution of Startups

The world of startups and venture capital has changed drastically in just over a decade.
Twelve years ago, startups were a rebellious pursuit, while today, they are an established field of study.

ADVICE

Prioritize Founders over Ownership

Focus on backing amazing founders rather than fixating on ownership targets.
Prioritize founder alignment with building a great company, and the math will work itself out.

INSIGHT

Outlier Investments

Even small ownership in outlier companies like Coinbase can generate significant returns.
Focus on funding exceptional companies; ownership percentages become less critical.

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David Tisch is the Founder and Managing Partner @ Box Group, one of the leading seed focused firms of the last decade with a portfolio including Airtable, Glossier, PillPack, Plaid and many more. Prior to founding Box, David was Managing Director of Techstars New York and was a prolific angel investor making early angel investments in the likes of Vine and Warby Parker to name a few.

In Today’s Episode with David Tisch You Will Learn:

1.) How David made his way into the world of tech and startups and came to change the state of seed funding in NYC with the founding of Box Group?

2.) Why does David believe that ownership requirements are "VCs projecting their problems on founders"? Why does David believe that ownership today fundamentally does not matter? How does David feel about his own relationship to price? Why is it important to be price aware across the portfolio, not on a per deal basis?

3.) What does David make of the rise of pre-emptive rounds? How does David advise portfolio founders who have them on the table? What other arguments does David use to founders contemplating taking seed rounds from multi-stage funds? How does David believe founders should assess their importance to the fund investing in them?

4.) How does David feel about his relationship to FOMO today? What have been some of his biggest misses in recent years? How have some of his biggest misses changed how he acts as an investor today? How have some of his biggest successes changed his investing lens? What changes did David and Box make to their decision-making process as a result?

5.) What does David believe are the biggest mistakes to turn down a company? Why is "too early" never a reason to turn down a company? How does David assess and think about market size today? Through what framework does David evaluate and assess competition today? What does David believe are some core concerns that are reasonable to turn down an opportunity?

Item’s Mentioned In Today’s Episode with David Tisch

David’s Most Recent Investment: Ramp

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