Ron Conway’s Journey into the Venture Capital Industry:
Born and raised in San Francisco, Ron Conway became immersed in the tech industry despite lacking a technical background. Conway’s early career at National Semiconductor instilled in him a strong work ethic and the importance of disruption. He later co-founded Altos Computer, a company that disrupted the mini-computer industry before facing disruption itself from the personal computer revolution.

Transition to Venture Capital:
Encouraged by Don Valentine, the founder of Sequoia Capital, Conway began his venture capital career in the early 1990s. Conway’s passion for mentoring founders led him to establish Venture Funds and focus on investing in software startups.

Focus on Software and the Internet:
SVH, Conway’s venture capital firm, exclusively invests in software startups due to their potential for growth and scalability. Conway recognized the significance of the internet early on and believed in its transformative power. In 1994, SVH decided to invest solely in internet startups, identifying Netscape as a key player in commercializing the web.

Investing in Founders:
Conway emphasizes the importance of investing in founders first and the idea second. SVH seeks founders with genetic traits that indicate their potential for success. Conway believes that certain traits, such as determination, resilience, and a strong vision, are essential for founders.

Crypto as Web 3.0:
Conway sees crypto as the next frontier in technology, similar to the early days of the internet and Netscape. He believes that crypto has the potential to revolutionize industries and create new applications. SVH is actively investing in crypto startups, recognizing the long-term opportunities in this emerging field.

Founder Gene:
Founders possess a unique gene that drives them to continuously start new companies. Traits that investors look for when evaluating founders include leadership, communication skills, and the ability to make decisions quickly.

Leadership:
Effective founders can clearly communicate their vision and inspire others to join them. This trait is crucial for attracting top engineering talent, who are often the first key hires for startups.

Decision-Making:
Procrastination can be detrimental to a startup’s success. Founders must make decisions quickly to keep the company moving forward. A team’s confidence in its founder’s decision-making abilities is vital for maintaining a productive and focused work environment.

Focus:
Founders must maintain a clear focus on their initial idea in the early stages of a startup. However, they must also be willing to admit when an idea is not working and be prepared to pivot quickly.

Key Traits of Leaders:
Staying focused and avoiding distractions Working hard and dedicating oneself fully to building a company

Impact of Funding on Founders:
Getting funded is a badge of honor and increases responsibility Founders feel obligated to work harder, make decisions quickly, and recruit a great team

Investing in Founders First:
Investors can help motivate founders and assist in securing subsequent rounds of investment Sometimes, investors may encounter founders with great potential but uncertain ideas

Notable Investments:
Mark Zuckerberg (Facebook): Conway initially doubted Facebook’s potential but was impressed by Zuckerberg’s focus on growth and user experience Twitter: Twitter’s early use case was unclear, but Conway invested due to his confidence in the founders, Evan Williams and Jack Dorsey Google: Conway recognized the potential of search engines and invested in Google after seeing the quality of their search results

Importance of Co-founders:
Conway emphasizes the significance of co-founders in successful startups He expresses some hesitation in investing in solo founder companies

Founders’ Synergy and Teamwork:
Strong teamwork is essential for startup success, especially when facing challenges. Having multiple founders with complementary skills and roles can enhance the company’s success. Co-founders who share a common mission and culture can create a highly motivated and driven team. A strong culture can help a company overcome challenges and setbacks.

Founders’ Role in Evangelizing Mission and Culture:
Founders should actively promote and communicate the company’s mission and culture to all employees. Effective founders can create a company culture where employees are motivated and engaged. A strong culture can help attract and retain top talent.

Founder Conflict and Management Turmoil:
Having multiple founders can increase the risk of conflicts and disagreements. Founders should be aware of this risk and take steps to mitigate it. Management turmoil can be detrimental to a company’s success. Founders should be willing to make difficult decisions and address conflicts promptly.

The Importance of Quick Problem-Solving:
Founders should address problems as soon as they arise, avoiding procrastination and letting issues fester. Startups often make mistakes, but the key is to learn from them and iterate quickly. Founders should be transparent with their team about challenges and involve them in finding solutions.

Deal Flow Management:
SV Angel receives about 100 investment opportunities per week, primarily from their extensive network of founders and investors. They have a dedicated team of three people to manage this incoming deal flow. Over the past 30 years, they have invested in approximately one company per week.

Failure Rates and Portfolio Approach:
In the early days, SV Angel’s failure rate was around 60%, but it has since decreased to 40% due to improved discernment and higher-quality deal flow. Despite the lower failure rate, they maintain a diversified portfolio approach, investing in about 50 companies per year. This diversification strategy mitigates risks and allows them to capture a broader range of investment opportunities.

Focus on Consumer Portfolio Companies:
SV Angel has a track record of investing in consumer portfolio companies, including Google, Facebook, Twitter, Pinterest, Square, and Stripe. They have also invested in SaaS and other software companies. Recently, they have shifted their focus towards crypto-related investments.

Advocacy for Founders and Non-Board Involvement:
SV Angel advocates for founders and does not take board seats in the companies they invest in. They believe that board involvement can lead to disagreements with founders and hinder the company’s progress. Instead, they serve as a resource for founders who face challenges with their boards or need support in dealing with unfair treatment. Their extensive network and influence in the VC community enable them to intervene and advocate on behalf of founders.

Challenges in Starting Today:
Conway acknowledges the current lofty valuations and the presence of “sloppy money” that adds limited value. He expresses skepticism about starting an angel investing business in the current market conditions.

Angel Investing Today:
Angel investing has become more accessible, but not all investors add value to companies. Conway believes every founder should get funded and is happy to see more companies receiving funding. However, he emphasizes the importance of investors who can provide advice and value beyond just capital.

SV Angel’s Strength:
SV Angel’s extensive network and relationships allow them to add value to founders by connecting them with key players in the tech industry. Conway highlights the strength of their relationships with companies like Google, Facebook, Twitter, Square, and Pinterest. SV Angel’s founders often seek connections with these companies, and SV Angel’s network enables them to facilitate these introductions.

Balancing Picking and Advising Roles:
Conway acknowledges the dual roles of an angel investor as both a picker and an advisor. In the early days of SV Angel, Conway and Ben Rosen were responsible for selecting investment opportunities. Over time, they expanded the SV Angel team, and Conway focused on teaching his team the nuances of identifying promising founders.

Teaching the Nuances of Picking:
Conway spent significant time instructing his team on the traits and characteristics to look for when evaluating founders. This training enabled the SV Angel team to effectively identify founders with the potential to build successful companies.

Ron Conway’s Transition from Picker to Advisor:
Ron Conway has shifted his focus from actively picking companies to invest in to providing high-level advice to founders. He enjoys working closely with founders to solve various problems and help them grow their companies.

Philanthropy and Civic Engagement:
Ron Conway dedicates a third of his time to philanthropy and civic engagement. He expresses concern about the income inequality gap and believes it played a role in the election of Donald Trump.

Airbnb’s Social Mission:
Airbnb has two social missions that contribute to a positive impact: It allows hosts to augment their income by renting out their homes or spaces. It promotes cultural exchange and understanding by connecting hosts and guests from around the world.

Pinterest’s Social Mission:
Pinterest also has a social mission that centers around sharing and discovering things together on the internet. It encourages collaboration and creativity among users.

Ideal Angel Investor:
One speakerasks Ron Conway about the qualities of an ideal angel investor. Conway’s son had previously mentioned that the value an angel investor provides is not solely dependent on the size of their checks.

Angel Investing:
A good angel investor invests to help founders solve problems, not solely for financial gain. Making money in angel investing is a byproduct of adding value to companies. Angels enjoy helping founders with personal issues that allow them to focus on their companies. The satisfaction comes from advocating for founders, not just making money.

Philanthropy:
Ron Conway believes in giving back and is a part of the Giving Pledge, committing to donate half of his wealth. He recommends startups to pledge 1% of their equity to a foundation that supports causes chosen by the team. This approach instills a culture of giving back, attracting new employees who value such values. Conway’s personal philanthropic interests include education for underprivileged students, sick children, and solving the immigration crisis in the United States.

France’s Startup Ecosystem:
Conway has been visiting France for over 20 years and is impressed by the country’s efforts to attract startups. He acknowledges that France has improved its tax rates, making it more attractive to businesses. However, he suggests areas for improvement, such as labor issues and termination processes, to achieve parity with other countries. Conway praises Business France for its work in promoting entrepreneurship, led by former Cisco CEO John Chambers.

Founder Pledge:
The Founder Pledge is the French equivalent of the Giving Pledge, encouraging founders to commit 1% of their equity to a foundation. This demonstrates a culture of giving back and attracts new employees who value such values. Conway emphasizes the benefits of joining the Founder Pledge and encouraging volunteerism.