Hustle Fund

Before co-founding Hustle Fund, you have worked at several other venture firms? What are some of your experiences that empowered you to enhance your business model at Hustle Fund?

Although my career started with ‘Beat the GMAT,’ the largest social network for MBA applicants, and continued with Instagram as a product manager, I found my true calling at Venture Partner. I was piqued by the venture capital (VC) game and saw multiple opportunities to improve the sector and facilitate a better funding experience for entrepreneurs. With this intent, we laid the foundation for Hustle Fund in 2017.

At Hustle Fund, we now focus on the earliest investment stage, also known as pre-seed funding. We recently came out with Angel Squad, a new initiative to make angel investing more accessible to entrepreneurs. This pre-seed stage is almost synonymous with angle rounds, where typically, small entities are formed for investment purposes by wealthy individuals who are either entrepreneurs or have experience investing in early-stage companies. With its Angel Squad, Hustle Fund is investing over 120 million with the help of its global team of 29 experts based in the San Francisco Bay area and Singapore.

How do you recognize opportunities in the market and make your investment decisions?

The initial step toward developing or commercializing a new product is getting sufficient capital. Since pre-seed money is the earliest part of the fundraising journey, it is challenging to acquire enough data about the product to make an accurate decision. Depending on this, the funding stage can happen quickly or take a long time. It’s also likely that investors at this stage are not investing in exchange for equity in the company. In most cases, the investors in a pre-seed funding situation are the company founders themselves. At Hustle Fund, we tend to find a couple of leading indicators of success that can be seen during the growth phase. In order to find the relevant indicators, we leverage several methods. A market poll, for instance, helps us determine if there is sufficient demand for the products developed by the company we are investing in.

We also pay attention to their sales methodology, including their ability to attract new customers. This is done primarily after we have written our first cheque, where we determine if the company understands sales, growth, and distribution. Justin Kan, the co-founder of Twitch, once said that first-time founders are obsessed over products, and second-time founders obsess over distribution. I think this statement is a perfect distillation of the types of founders that we’re trying to find and gather attributes for our teams that are not just interested in building a great product experience but also trying to do a real business and validate whether there is a real market to sell to and validate that through actual dollars.

How do you work with your clients when making an investment? Is there any unique onboarding approach that you follow, and how does it benefit your clients?

The most critical thing I ask founders is, what is the most significant roadblock to your business right now? And what can I do to help you cross these hurdles? There are a few common themes, and one among them is fundraising. Hustle Fund, along with Angel Squad, invests in the top-performing companies with higher valuations.

“At Hustle Fund, we tend to find a couple of leading indicators of success that can be seen during the growth project phase”

Next, we will work with the team on a growth project related to sales or user acquisition. If we invest in the entrepreneur, we want to support them immediately, whether by filling their top of funnel lead generation for new clients or allowing them to finalize agreements. We also educate them on the most refined techniques for running sales and growth in their early business. To do this, we have devised a proprietary school named Redwood. This school teaches the best foundational principles on development and is only available to Hustle Fund’s portfolio companies. However, our team may gain a much greater understanding of a company’s work culture by collaborating with them on a project within their organization. The team works hard to witness their work firsthand and understand as much as possible about the market they are servicing to assess if it can fulfil a significant portion of the venture backlog. We will do so if we invest more money because we believe a sizable return will be generated. Hustle Fund’s selection process starts with small cheques. It gives the team a sense of what it’s like to work with Hustle Fund.

What is the approach you follow to measure the potential of entrepreneurs? Is there any unique methodology that you adopt during your engagement?

Including me, three general partners started this Hustle Fund together. With our team of 29, the three of us have begun to scale the company. We were all operators before we were venture capitalists, so we understand the needs of our clients. We always explicitly share the social contract with founders at the start of our engagement based on three main principles.

Firstly, we commit with honesty and bluntness as our cornerstone. Secondly, we always assume things are going unsatisfactorily whenever we are on a call or catching up. It’s not because the companies are wrong or the founders are flawed that we want to get into problem-solving mode, but to assist them in their growth journey. Thirdly, our social contract does not hold the founders responsible for the capital as long as they utilize it to build and enhance their products or services.

We have a simple hypothesis at Hustle Fund: the best leading indicator of success in teams, even in the early stages of company formation, is a quality we call Hustle. For us, Hustle means high-velocity groups that are oriented toward experimentation measurements. The intriguing aspect about Hustle is that we don’t feel we can tell someone is a true ‘hustler’ based on an initial presentation. Instead, we believe that working with the teams is a better method to understand ‘Hustle,’ which drives our investment model and solves your question. We know this is a very high-risk game, but eventually, a winner will win.