BRV Fund Manager and Author: Kevin Grathwohl
What events led you to VC and when did you realize that it was the career for you?
I went to Cornell undergrad. I was in the college of human Ecology, but my focus was kind of on a three-discipline major, including bioeconomics, and math to bridge the two. I was always very interested in both science and economics. The business side fascinated me, but, at the time, I couldn’t find the right way to fit these interests in the world.
I started in biotech consulting, doing strategy, and M&A. I focused more on the business development side of biotech, which was a nice blend of my interests. But I realized that the commonality between my curiosity in economics, business, and economics was more about problem solving and understanding the way the world works from a logical perspective. Kind of like behavioral economics in the way that financial markets work and how macroeconomic change can shift down and affect human behavior. So that was the crux of what I was interested in; an obsession with what are the problems in the world. Such as how do we increase efficiency, are the business models viable, does this technology even solve a problem, is this company selling to the right person, and does this product provide value for prolonged period of time.
Candidly, I didn’t know what VC was. Until my senior year at Cornell when I took a class for my final credit of my major that was on startups and venture capital. So that was my more formal introduction to it. And then that led me to start my career. I started in private equity/growth equity, doing mostly Series B, C, and a few buyouts at a Boston-based firm, investing in B2B SaaS companies. Then from there, I just had an itch for the more entrepreneurial side of investing, in particular incubating ideas, how do you know if an idea is viable, if there’s a market for this concept, who you sell it to, and what pricing strategy to leverage. I preferred this perspective rather than vetting it from a much later stage investment where you’re analyzing a financial model while looking through historical data.
That inspiration led me to a Series A fund. Personally, I am super passionate about health and well-being, and in particular women. I went to a fund investing exclusively in women-founded businesses with a focus on the health and wellness space. Then from there I went even earlier in the innovation spectrum to Antler, which I’ve been at for almost two years now. At Antler, we find people that we believe are going to build the next billion-dollar businesses and we bring them in at the ideation stage.
While in the early stages of formulating, all the founders possess is a passion for creating a company, coupled with deep domain expertise or a desire to address a specific problem. Their focus may be on a sector they’re passionate about or an inefficiency they’ve identified. And Antler brings them into a seven-week program, ideates with them and invests in the top founders with top ideas. So, to wrap, I went from the most late stage of the game to the very, very earliest over the past five years.
Was it a challenge to be able to move away from having data points and historical financial information for making decisions to much more of an art-based decision-making within the venture world?
Totally. Totally, later stages are primarily focused on the data. The position involves analyzing numerical data to derive insights that will inform investment decisions. Overall, the role requires a thorough quantitative analysis of industry comps, M&A activity, and capital raises to gain insights into a target company’s valuation.
Early stage is much more innovative in that you are you’re underwriting founder execution, founder’s resilience, and a founder’s ability to see a unique problem in the world. Then a layer deeper is to analyze founder market fit, the depth of domain expertise, while they remain emotionally detached to enable logic-based when receiving customer feedback. Therefore, founders, rather than building for what they think needs to exist, design for what the customer needs. This switch in the mindset for me from going through data and performing quantitative analysis to form a decision, to getting to know people and tapping into behavioral psychology of really understanding how a founder works, thinks, and believes, in order to underwrite an investment.
So, it’s totally different school of thought. And it’s difficult. Our Antler team of seven in the NYC office, all have a slightly different understanding of what makes strong founders. 90% of the criteria is the same, but it remains subjective.
What drew you to join Antler, and can you share some aspects of your role that you find especially thrilling?
Yeah, one is culture fit, for sure. The team’s incredible. It’s young, it’s innovative. People are very passionate, creative, strong personalities, with original thinking. It’s a fun and autonomous environment to work. So, culture, for me, is always an important factor.
In addition to that, the job’s cyclical. Therefore, you’re both half operator, and half investor. We run two cohorts a year. They’re each seven weeks long. And I spend my summers and winters scouting for the next residency season. Cohorts are October to April. Therefore, during my summer and winter, I’m have that investor hat on when going out and interviewing people and filling cohorts rather than reviewing business models and pitch decks.
And then the job totally flips to a builder. Every spring and fall, we’re all hands-on deck. I’m working with 140 founders right now in our New York office, where we’re ideating, talking through different go-to-market strategies, honing in on an ICP, and determining if business pivots are needed.
So, you’re a pseudo co-founder of 140 different startups, which is really fun. Antler is a very, very unique blend of both an investor and an operator, at the same time.
Speaking a little more about Antler, like the firm is very global. You have a wide kind of network of offices across the world. How are you able to leverage that that network to stay on top of market trends, as well as have good deep expertise into specific areas?
Yeah, what’s amazing is Antler operates as a tech company. The people in the firm are showcasing a remarkable level of diversity and activity within the industry. They engage in market mapping, contribute to thought leadership through podcasts, author informative news articles, and participate in events worldwide. Leveraging our global network, we synchronize data and functions across teams to monitor developments in Europe, South Africa, and Australia, facilitating continuous learning. Our structure includes regular global meetings that span the entire fund, supplemented by specialized media teams and data aggregation tools. This approach, resembling a tech company’s operations rather than a traditional venture capital fund, provides us with significant leverage.
And taking a step back, you’ve been in VC for a couple of years now. What was something you wish you knew when you were first getting into it?
You know I personally have a deep passion of health and wellness. I think it would have been great to have domain expertise earlier in my career and become an expert in the space of health and wellness. I think domain expertise makes the job fun because you profoundly understand the space. And because investing is hard, especially when you’re investing across a multitude of verticals, it’s amazing when you can look at a health and wellness company and fully understand the interworking’s of the industry. In particular, being familiar with the market saturation, the competitive landscape, and user behavior that determines if this is a viable solution that people actually need.
I hear all the time from people I really want to get into VC, asking “if firms would take someone like me” or “would they interview someone like me?” And I’m like, every VC fund wants an operator as a partner. Former operators are helping our portfolio companies make decisions and provide strategic advice, especially at the early stage when you’re building these companies alongside the cohorts. All founders want people with deep operating experience.
And similarly, there’s a lot of young adults coming out of college, unsure if they studied the right major, asking “how can I get into VC?” And I believe that there’s no one linear path into venture capital. There’s no formula to be a great venture capitalist. I always say that all the ingredients that you need are intellectual curiosity, a deep desire to learn, an ability to understand people and how build a network. And key traits of an effective venture capitalist include trustworthiness, fairness, and honesty, integral to a career that is fundamentally about continuous learning.