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

20VC: Floodgate’s Mike Maples on 3 Key Breakthroughs Startups Experience in Success, The Rise of Angel and Operator Funds, Multi-Stage Funds Re-Entering Seed Investing and The Insight Development Framework

May 11, 2020

Mike Maples, Founder and Partner at Floodgate, shares his journey from entrepreneur to venture capitalist, focusing on the breakthroughs that define startup success. He discusses the two key breakthroughs that excite him and explores how inflections can create significant opportunities, with insights from investing in Lyft. Mike also analyzes the rise of operator and angel funds, as well as how large multi-stage funds are impacting seed markets. His emphasis on developing insights and the importance of 'backcasting' provides a fresh perspective for aspiring founders.

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ANECDOTE

Mike's Path to Venture

Mike Maples transitioned into venture capital after being an entrepreneur.
He moved to California in 2004, initially searching for a VC job before founding Floodgate.

INSIGHT

Startups vs. Companies

Startups are not merely smaller versions of companies; they begin dead and must prove their viability.
This involves a sequence of breakthroughs: insight, value proposition, and growth.

INSIGHT

Defining Breakthroughs

A breakthrough is a significant discovery or development.
For startups, these are: insight, value proposition, and growth breakthroughs.

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Mike Maples is a Founder & Partner @ Floodgate, one of the leading early-stage firms of the last decade with investments in the likes of Lyft, Twitch, Twitter, Okta and Sonos to name a few. He has been on the Forbes Midas List since 2010 and was also named one of “8 Rising Stars” by FORTUNE Magazine. Before becoming a full-time investor, Mike was involved as a founder and operating executive at back-to-back startup IPOs, including Tivoli Systems (IPO TIVS, acquired by IBM) and Motive (IPO MOTV, acquired by Alcatel-Lucent.)

In Today’s Episode You Will Learn:

1.) How Mike made his way from founding startups to entering the world of venture and the gap he saw in the market when founding Floodgate?

2.) Mike has previously said, "a startup is not a company, it is a series of breakthroughs". How does Mike define a breakthrough? What are the 2 most meaningful breakthroughs a startup can experience? Which excites Mike the most to see? How do the best startups scale pre-breakthrough to post-breakthrough?

3.) What are the core ways inflections can create breakthrough opportunities? What were Mike's learnings on inflections from investing in Lyft? What does Mike mean when he talks about the importance of "backcasting"? What did investing in Twitch teach Mike about forecasting?

4.) How does Mike feel about the rise of operator and angel funds? How does Mike analyse the re-entrance of large multi-stage funds back into seed markets? Does Mike agree with Semil Shah, "founders are voting with their feet and taking multi-stage money at seed"?

5.) As Mike's peers have all moved into larger funds, Mike did not, why? How does Mike view "fund size as your strategy"? How does Mike think about the centrality of ownership? Does Mike really believe you can concentrate capital into your winners? What are the challenges? Why does Mike feel self-promotion is one of the biggest challenges in VC?

Items Mentioned In Today’s Show:

Mike’s Fave Book: Superforecasting: The Art and Science of Prediction

Mike’s Most Recent Investment: CommonStock

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