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

20VC: BoxGroup's David Tisch on Whether Concentrated Investing At Seed Works, Do Founders Really Want Direct Feedback and Is It Good For Them & Why Consumer Social Is Interesting Again

Dec 2, 2019

David Tisch, Founder and Managing Partner at BoxGroup, shares insights from his venture into early-stage investing. He discusses his transition to raising over $160 million in external capital and the impact on his investing mindset. Tisch explores the debate around concentrated seed investing, emphasizing the importance of collaboration and genuine feedback for founders. He also highlights the resurgence of consumer social tech, pinpointing how platforms like TikTok cater to younger audiences and enhance online engagement.

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ANECDOTE

Accidental VC

David Tisch's path to venture capital was accidental, stemming from a love for the internet and its evolution.
He transitioned from lawyer to startup founder, then joined Techstars, leading him to found Box Group.

INSIGHT

External Capital Strategy

Box Group waited ten years before accepting outside capital to validate their model and investment strategy.
External capital allows for increased check sizes and deeper partnerships with founders.

ADVICE

Collaborative Seed Investing

Box Group prioritizes collaboration over competition, focusing on securing allocation in promising deals.
Their flexible check sizes (200k-500k) accommodate various investment stages, typically not leading traditional seed rounds.

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David Tisch is the Founder & Managing Partner @ BoxGroup, one of the leading early-stage firms in NYC with a portfolio that includes the likes of Flexport, RigUp, Ro, Glossier, Clearbit, PillPack and Plaid, to name a few. Recently they raised their first external capital with 2 separate vehicles totalling over $160m. David is also Professor and Head of Startup Studio @ Cornell Tech. Prior to BoxGroup, he was Managing Director of Techstars NYC and before that was an Executive Vice President @ KGB.

In Today’s Episode You Will Learn:

1.) How David made his way into the world of early-stage investing? How he made the transition from prolific angel investor to raising $160m+ in external capital? Why did David feel now was the right time to raise external funding after 10 years of self-funding? How has taking on external capital changed his investing mindset?

2.) Many suggest that "concentrated seed investing does not work", how does David think about and assess portfolio construction? May others also suggest that, "seed investors are not company builders", does David agree with that? Does David believe investors can change the trajectory of a company? Where can they help the most? Where do many think they help but they actually do not?

3.) Why does David believe that founders do not speak openly about bad experiences with VCs? What have been David's biggest lessons on the right way to turn down an opportunity? Do founders really want direct and honest feedback? Is it actually damaging to give it to them? Why? How does David approach this?

4.) Why does David believe "consumer social is interesting again"? Why was it not interesting for a while? How does that mean David is approaching the category? What does David mean when he says, "for the first time ever there is no channel to arbitrage on the internet"? Is David concerned by the state of CACs today? How much attention does David pay to CAC/LTV in the early days? What are the key signals?

Items Mentioned In Today’s Show:

David’s Fave TV Show: Survivor

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