Welcome back to Venture Visionaries, a series from Outlander VC where we dive deep into what distinguishes top investors and explore their unique perspectives on the startup ecosystem.
Join us as we engage with some of the most influential figures in venture capital, uncovering the strategies and insights that have shaped their success and learning how they navigate the evolving world of investing.
From investment philosophies to future predictions, these conversations will inspire entrepreneurs and anyone curious about the venture capital space.
This month, we had the privilege of sitting down with Tim Young, founding partner of Eniac Ventures (Eniac’s portfolio includes AirBnB, Headspace, Hinge, and more). In our conversation, Tim offered his perspective on what sets founders and investors up for success, rooted in his experience on both sides of that equation.
Tim’s unique, grounded outlook on how to identify promising teams and support them through the ups and downs of building a company are what have helped make him (and Eniac) wonderful investors that we love to partner with at Outlander.
You can watch the full conversation here!
And be sure to sign-up for our Fall 2024 portfolio showcase!
Here are three key takeaways from the conversation:
Integrity isn’t optional for Tim. He stresses that while founders might have many areas to grow or develop, trustworthiness is too easily shattered and difficult to repair for him to back a low-integrity founder. The ripple effect is massive: a founder lacking integrity can sabotage their team, erode investor confidence, and ultimately derail the entire company.
Often, integrity (and another key character trait we look for: grit) reveals itself in moments of adversity. How have challenges been handled in the past? Are you an ego-driven leader or a servant-leader who leads by example, respects their team, and constantly builds trust? Ultimately, as Paige expressed in the conversation, “power doesn’t come from rank; power doesn’t come from mission.” It comes from the earned respect of your team, your investors, and your customers.
Tim Young has a simple yet profound question he asks himself before committing to an investment: Would I leave my job and work for this person? It’s a gut check that cuts through all the hockey-stick financial projections and product demos to get at the heart of what matters—leadership.
This is something that we, at Outlander, call being an infectious evangelist: having the storytelling charisma and leadership ability to not only win over your co-founders, but team members, investors, and customers.
This question isn’t just about the founder’s vision; it’s about their ability to inspire trust and loyalty. And we love Tim’s gut check: When Paige was an early investor in Lyft (then Zimride), he described that feeling of wanting to not just get involved as a check-writer, but to actually go and join the team in the mission. Fast-forward 10 years and that litmus test checks out, with Lyft surpassing $5.22B market cap.
Moral of the story for founders: hone your leadership and evangelizing skills. Because if investors can’t see themselves willingly joining a founder’s team, it may be a sign that other talented individuals may feel the same. A great product can only go so far if the founder lacks the ability to attract and retain top talent.
Tim Young is realistic when evaluating founders—he knows no one is perfect. In his words, “There are no 10/10 founders.” Every founder has areas of strength and weaknesses, and as an investor, it’s essential to recognize this early. What matters isn’t having a flawless skill set but having the self-awareness and coachability to improve over time.
For Tim, identifying gaps in a founder’s abilities isn’t a dealbreaker. Instead, it’s about understanding where those gaps are and whether the founder is willing to address them. Are they open to bringing on team members who can complement their weaknesses? Are they willing to seek mentorship or guidance where they lack experience? Having a blind spot and being unwilling to hear about it can make it hard to reach conviction.
Savvy investors know to mostly stay out of the way except when necessary, so chances are that if you are working with an investor who has a track record like Eniac or Outlander, when they are pulling you aside, it’s important.
Final Thoughts
Tim Young’s approach to investing emphasizes a deep commitment to understanding founders as people. It’s a belief that we share at Outlander and is the driver of our Founder Framework. For us, it’s not just about metrics or market opportunities—it’s about asking the right questions and backing people that we believe in.
Watch the full conversation between Paige & Tim here.
Stay Outlandish and, as always, be sure to pitch our team your vision at: www.outlander.vc You can learn more about Eniac at www.eniac.vc
As an investor, I’ve seen a lot of startup pitches—the good, the bad, and the ugly. And as a former founder, I feel for them. I know how daunting it can be to take the vision in your head, condense it into a clear explanation, and get others to quickly believe in it too. Early on, I also struggled to succinctly communicate the vision I had for my company.
At Outlander VC, I combine my experiences as a founder and investor to help our portfolio companies perfect their pitches. These are some of the best tips and tricks I’ve learned along the way to prepare, perfect, and present your pitch so that investors want to hear it.
When you’re raising capital in the early stages, there isn’t much of a company to pitch yet. It’s just a few folks, an idea, and maybe an MVP. You probably don’t have customers, users, or meaningful quantitative data to inform the investment decision.
Early-stage investing decisions come down to evaluating how the founders answer the following questions, based on Outlander’s Founder Framework model:
Ultimately, early-stage investors are looking for a founding team worth betting on. Early-stage founders with compelling answers to the above questions demonstrate they have the intelligence, vision, character, and ability to execute necessary to build on their thesis and scale it into an industry-disrupting powerhouse.
Helping early-stage founders perfect their pitches, I’ve noticed a common disconnect: passionate founders who eat, sleep, and breathe their startup perceive the cadence of their pitch as clear, confident, and compelling—but investors often hear it differently.
For example, I was recently working with a founder on his pitch. He has the big vision and passion necessary to convince investors, but his delivery needed fine-tuning. Seeing is believing, so I suggested he record his next pitch and send me the recording.
The next time we spoke, he told me that he’d realized, watching the recording, that he’d had no idea how his pitch sounded. With the recording, he could self-critique and correct every part of his delivery he didn’t like. He could sit on the other side of the pitch deck and, for the first time, see exactly what his potential investors would see.
We decided to take this exercise a step further. Instead of booking time with peers to get their feedback, he sent them links to his recorded pitch. Recording his pitch practice worked well for several reasons:
Recording yourself isn’t novel—it’s a time-tested tool, and it’s still highly effective. Plus, with new WFH tools like Loom’s simultaneous camera, microphone, and desktop recording technology, sharing a virtual pitch has never been easier. If you want to perfect your pitch, consider tapping “record” first!
As I said, I’ve watched a lot of pitches. The most painful to watch are those where the investor struggles to understand what the founder is trying to communicate. But I’ve helped founders whose pitch crashed and burned in the morning regroup, adjust their approach, and nail the same pitch a few hours later.
The difference? At the beginning of the second meeting, the founders sought to understand their audience by asking a few simple questions, which allowed them to deliver the pitch in the way the audience preferred. The change was small but powerful.
Here are a few questions founders can ask to understand their audience:
Understanding the audience goes a long way toward helping founders communicate effectively and gain support. The questions above will help accomplish that, but it’s by no means an exhaustive list. Plenty of other questions would also work. Regardless of what you ask, I’d limit it to two or three questions.
Now that you’ve perfected your pitch, we want to see it! Here’s what you need to know:
Outlander VC is inviting the most innovative early-stage tech startups in the United States to out-vision, outsmart, and outpitch the competition at OutPitch 2.0! Apply now to compete for $100,000 investment from Outlander VC during the live event on December 7, 2021.
For more expert advice on building and scaling your startup, check out our event library and Field Notes.
When I began investing over a decade ago, I evaluated deals using a holistic lens: a well-built company with an innovative product made for a good investment. Using this company-centric framework, I invested $1M into 20 companies during my first year that I thought had a good shot at success, but within 12 months, all but a few (shoutout to ExpenseCloud, Klout, Ticketmob, and Burstly—all 4 of which I later sold my shares in for $2.7M) were clearly failing.
Frustrated, I began taking inventory of the different factors that could’ve prevented them from succeeding, but their solutions, business models, and market influence all checked out. And yet they were still failing.
At the time, I was meeting with founders and listening to traditional pitches and predictive cash flows, which always painted a really pretty picture of the future if all went well. But over time, I understood that expecting things to go according to plan was unrealistic. The only real predictable factor with startups is that their industries will inevitably shift, and their founders will have to find ways to effectively respond. So if change is as inevitable and uncontrollable as the weather, then what aspect of each startup can we look to for constancy?
I decided that if I wanted to be an adept predictor of startup success, I would have to develop a specialized talent in evaluating the founders themselves.
I started observing and analyzing the factors that set successful founders apart from others. What psychologically differentiated them, and how did the stories they told us about themselves differ?
The answers that I found won’t come as any surprise to literature buffs: the most successful founders had shared characteristics rooted in the defining moments of their lives. In other words, they all followed the archetypal hero’s journey. Their personal stories often hinged on a moment (or moments) when they struggled deeply but somehow found a way to persevere or overcome an obstacle they couldn’t control or foresee.
These kinds of stories gave me a glimpse into a founder’s internal GPS, which could be used to predict how they would handle the chaos of a startup’s lifecycle. I began to see that some founders are more wired for adaptability, so I stopped asking for their pitches first and started asking them to tell me about themselves—their stories, their challenges, their fears. The answers they shared in conjunction with the success or lack of success they inevitably experienced provided me with the evidence I needed to build Outlander’s Founder Framework.
Our Founder Framework is the most important evaluation tool we use when deciding whether or not to invest in a startup, and like the industry we work in, it’s constantly evolving as we learn more about founders and their psychological makeup. Currently, the Framework consists of 38 characteristics divided into four categories: vision, intelligence, character, and execution. Like any good literary hero, outstanding founders need strength in each area.
Vision: Think of a founder’s vision as their map. It might not be extremely detailed, but it gives them a necessary outline for the journey that lies ahead of them. It helps them predict hurdles, and it gives them a compelling way to convince others to join in on the quest. Founders with great vision aren’t as focused on the ways they want to get to their destination; they tend to focus on the fact that they’re dedicated to getting there by any means necessary.
Intelligence: When I refer to intelligence, I’m not talking about how high their IQ is or where they got into college, although those things don’t hurt. What I mean is that they have a great internal compass—meaning knowledge of their venture’s industry, the skills to navigate through complications, and experiential knowledge that led them to create this particular solution. When their ship goes off course (and it will), they have the intelligence to get back on course and to learn from the detour.
Character: A lot of extremely successful founders have been what people might refer to as “a real character,” but when I’m evaluating a founder’s character, I’m actually trying to find out what fuels them. I’m looking for homegrown mental fortitude, something akin to grit and determination. A lot of people say they’re ready to give all of their time and energy to see a venture through, but only a handful of them really mean it.
Execution: A founder’s ability to execute is all about their ability to make choices. Founders with this strength know how to combine their vision, intelligence, and character in order to arrive at the next course of action quickly and deliberately. They must be open to adapting their approach or perhaps even looking for opportunities to experiment.
At Outlander VC, we believe in the methodology behind our Founder Framework, and we apply it early when determining whether or not we will invest in a company. So what does that look like in a practical sense?
Founders must score highly in all four categories or we will not invest no matter how good their idea is. That may sound extreme, but let me ask you:
Without a visionary founder, who will entice investors to give the startup an opportunity?
Without an intelligent leader, how will a company know what the next best move is?
Without strong character, who will keep pushing the team and find ways to renew morale?
And without someone ready to execute, how will the startup progress to new levels?
After 14+ years of investing, I know this much: even the greatest ideas are doomed to fail without a well-rounded and dynamic founder to lead the way.