Investing in Startups

Courtney McCrea, Cofounder and Managing Partner of Recast Capital, backs and builds emerging venture managers. She discusses why backing early managers matters. She explains fundraising realities, how LPs should evaluate first-time funds, solo GP versus partnership risks, and practical diligence like targeted reference checks. She also covers pods for peer support and the hesitant pace of AI adoption among LPs.

Dan Teran is a Cofounder and Managing Partner of Gutter Capital. Gutter is an early-stage firm based out of New York focused on founders tackling the world’s toughest problems. We talked about why Gutter invests with conviction, why they seek out founders with unique insights rather than Gutter trying to dream up their own, and how AI can solve problems in the real world, not just online. We also dug into:   + Gutter’s core focus on vertical AI, vertical SaaS, and marketplaces tackling messy, real-world problems + Why Dan gravitates toward underestimated, “lived-experience” founders over polished, pedigreed profiles + Inside Elbow Grease, Gutter’s AI accelerator: structure, check size, and how they plan to keep backing winners + How Gutter turns talent into a product: embedded head of talent and heavy support on early hiring + The firm’s discipline on valuations, small fund sizes, and staying aligned with founders in a top-heavy market + Why Gutter insists on taking a board seat at seed and how that sets companies up for stronger Series As + Dan’s lessons from selling Managed by Q to WeWork and why founders should build acquirer relationships early + Two contrarian views: second-time founders are overrated, and the best founders do want real help from their investors   Investing in Startups is produced by Seaplane Ventures and hosted by Joe Magyer.  

Our guest this week is David Gardner, Cofounder of The Motley Fool. David is one of the best stock pickers of his generation. While for many investors a single 100X investment would be a career-defining win, David has earned a 100X return on 6 companies including Nvidia, Tesla, Amazon, and Netflix. We talked about breaking the rules of investing, optionality, valuation, letting winners run, and much more. David is one of the investors I’ve learned the most from over the years, so I really hope you enjoy this one.   Investing in Startups is produced by Seaplane Ventures and hosted by Seaplane Managing Partner Joe Magyer.

David Zhou is an investor in emerging managers, an angel investor, a blogger, and the host of the Superclusters podcast. We talked about how LPs can size up emerging managers, how VCs can stand out, portfolio construction, and which of sourcing, picking, and winning is the most important. We also explored:   + Why David thinks that “access beats picking (then winning)” for most emerging managers—and how check size changes that calculus.   + Follow-ons: when “all or none” makes sense, how signaling risk compounds past Series B, and why selling by Series C can be clean for seed managers.   + LP incentives in the wild: marks scrutiny for new managers vs. “ignorance is bliss” for existing ones—plus how TVPI vs. IRR targets shape decisions.   + The tough-love playbook behind “Dear Emerging Manager” and “Dear LP,” and why sloppy valuation methods and survivorship bias mislead GPs.   + Differentiation framework: sell the market → the strategy → then you; use “flaws, limitations, restrictions” to confront the elephants in the room.   + Fund design realities: reserve strategy, fund size vs. dilution (esp. in hard tech), and why some LP minimums are a built-in constraint.   + Context from fresh market data: median seed at ~$20M and AI capturing a huge share of early deals—what those trends mean for formation and pricing.   + Plus: Abe Othman’s follow-on finding (funds that never follow on beat always-follow funds 63% of the time) as a jumping-off point for David’s take.   Investing in Startups is a Seaplane Ventures production hosted by Joe Magyer.

We're trying something new with our first roundtable! Our guests are Sonia Nagar from SNAK Venture Partners and Colin Gardiner from Yonder Ventures. Sonia and Colin are both early-stage investors, friends of mine, and experts on marketplaces and network effects. We talked about AI’s role in marketplaces, why network effects aren’t more popular (even though they should be), how to make your own luck, what it’s really like to raise your first venture fund, and more. I hope you enjoy and thanks for listening.   Investing in Startups is produced by Seaplane Ventures. 

Hunter Walk, Co-founder of Homebrew and Screendoor, shares his transformative journey from LP-backed investing to a self-funded evergreen model. He discusses the importance of trust and context in working with founders, emphasizing the need for specific advice over generic guidance. Hunter also delves into how valuations signal founder decision-making rather than being mere price tags. He advocates for flexibility in investment size and prioritizing founder alignment over scrappy ownership targets, all while treating a startup like a product in constant refinement.

Joe Magyer is the host of Investing in Startups, but his real job is running his early-stage boutique, Seaplane Ventures. In this episode, Joe is interviewed by his friend Owen Raszkiewicz, Founder and CIO of Rask Group and host of the Australian Investors Podcast. Joe talked why he made the move from public to private markets, how small firms can compete with big firms, the current venture landscape, putting AI to work as an investor, and why studying up on unit economics is a core part of early-stage investing. Please enjoy.  

Jackie DiMonte is the Cofounder and General Partner of Grid Capital. We talked about power laws, investing with conviction, how to help founders in their earliest stages, small funds vs. big funds, and whether pre-seed valuations really are mental. We spoke in depth about:    - Why Pre/Seed (not just “pre-seed”). Jackie sees pre/seed as a continuum and optimizes for investing “before it’s obvious”—pre-PMF and before scale playbooks kick in.    - Concentrated by conviction. Grid leads rounds so every check matters; “party rounds” left no owner, unclear milestones, and shaky odds—so she backs fewer, deeper and sets explicit experiment plans.    - The pre-PMF playbook. Start with a market hypothesis, define the signals that prove or disprove it, and don’t hide from feedback—iterate fast on product, pricing, and business model.    - Control points > features. In crowded industrial/logistics AI, she looks for wedge use cases with fast time-to-value and durable leverage; otherwise it devolves into a customer-acquisition bloodbath.    - “Frenemies” in supply chains. Competitors often integrate and overlap; Grid underwrites only when the entry point creates credibility to crowd out others—important for a small, high-ownership fund.    - Founder archetype. Best fit: builders with industry roots and high-growth tech chops who show real customer empathy; solo vs. teams can both be superpowers.    - Marketplaces & vertical AI (reality check). Network effects are unmatched, but in industrials behavior change and trust make embedding hard; Jackie favors either core systems of record or AI-enabled services that deliver outcomes, not middling bolt-ons.    - Valuation dispersion & speed. The “power law” now shows up in fundraising: a few rounds price mental and close overnight on relationships, while most processes remain slow and illiquid.    - Geo lens. Grid’s industrial thesis maps to Chicago/Austin and the Atlanta-to-NY corridor; LA is emerging in manufacturing—where domain roots meet tech talent.   Investing in Startups is a Seaplane Ventures production and hosted by Joe Magyer.

Morgan Flager is the Managing Partner of Silverton Partners. Silverton is an early-stage firm that has had more than 30 companies IPO or get acquired. We talked about the art and science of portfolio construction, when to bend on price, and which of team, product, or market is most important. We also dove into:   Silverton’s “early PMF” lane. Sweet spot is writing ~$3–7M checks into companies with a handful of customers and early revenue; ~70–80% fit this stage, with occasional earlier/later outliers. About 60% of deals in Central Texas, ~10% elsewhere in TX, balance nationwide—leveraging two decades of local reputation while staying opportunistic.   Follow-on edge = objectivity. They’re data-driven on reserves, but the real unlock is knowing when not to keep doubling down; partners anonymously rank each other’s companies to curb politics and fumes.   Secondary rules of the road. If a breakout round implies 5–10x+ on a small sell (10–20%), they’ll often take it—bank DPI, let the rest ride; in 2021 they even mandated trims in that range. Fund-life alignment matters. As vehicles near years 10–12, selling a majority (or all) via secondary is often the right call.   Owner mindset inside the firm. Silverton lends to team members so they can co-invest—shifts psychology toward prudent partial sales vs. “let it ride” with other people’s money.   Team > market > product (at maturity). Early it’s founder-led, later it’s team-led; great teams self-correct on market/product, and Silverton will back a stellar team in a merely “B” market over the reverse.   Why origin stories matter. He listens for authentic passion and connection to the problem—grit to push through the “dark, lonely days” shows up in the journey, not the pitch deck.   Valuation realism > unicorn fantasies. Morgan calls BS on “pay any price” at seed; most outcomes aren’t $10B, and mispriced seeds can trap founders and misalign with later-stage mega-fund incentives.   Austin culture advantage. Smaller, reputation-sensitive network rewards doing right by founders; openness and pay-it-forward energy were a positive “culture shock” vs. the Valley.   Investing in Startups is a Seaplane Ventures production hosted by Joe Magyer. 

Rex Salisbury is the Founder and General Partner of fintech-focused Cambrian Ventures. We talked about how Rex built a big community and following in the fintech world, why fintech startups are on a roll, disruption versus partnership, and how the venture world is evolving.   Other topics include:   The Bay Area fosters a unique culture of openness and innovation. Building a community is essential for networking and support in FinTech. Fundraising for venture capital can be challenging, especially for emerging managers. Talent in FinTech has significantly improved over the past decade. FinTech companies are increasingly taking market share from traditional banks. Vertical SaaS is a growing trend that could disrupt traditional banking. Mortgages may become a viable second product for FinTech companies. Early-stage investors can leverage their networks to help founders succeed. The series A market is evolving, with changing metrics for success. The LP ecosystem is slow to adapt, impacting venture capital dynamics.   Investing in Startups is hosted by Joe Magyer and produced by Seaplane Ventures.