Jules Miller, a partner at VC firm Mindset Ventures, has sat on both sides of the aisle. As a startup founder turned venture capitalist, Miller has a unique perspective on VC funding and the path startup founders take to get there.
During this interview with business podcast Startup Savants, Miller weighed in on the difference between angel investors and venture capitalists, pitch deck faux pas, and the startups that should (or shouldn’t) take venture capital.
What is the difference between angel investors and venture capitalists?
“Some angel investors end up being full-time venture capitalists. Some do not. Some venture capitalists angel invest; some do not. There’s some concentric circles around both of those things, but overall we’re both investing in innovation, but venture capitalists are full-time professionals, usually managing other people’s money, and angel investors are individuals usually investing their own money.”
What is a startup?
“You may be a founder of a company, but it may not actually be a startup. That growth pain, that intensity, that pace of growth, that scale, is something that is really, really important when we differentiate between a typical business and what is considered a startup.
Everyone needs to be on the same page that this is a high-growth company, and the company cannot grow 10, 20, 30% a year. It has to be growing 200, 300, 400% a year. And that’s a very different type of business than most entrepreneurial ventures.”
When do you expect to see a return on a venture capital investment?
“Venture capital is diversified as an asset class in some way, meaning we’re all looking for high growth; we’re all looking for big returns in a reasonably short time period. Five to eight years is typically where we’d want to see an exit. Meaning you go from me writing a check to you returning my capital, either through an acquisition or an IPO.”
What types of startups should not consider raising venture capital?
“I think people don’t necessarily always understand what venture is and think they want to raise venture and actually do not. So the two things, again, we’re hitting some common themes here, but I can’t drive them home enough is, if you are not prepared to grow 200, 300 more percent a year, you should not take venture capital.
The other thing is that you do need to understand that most venture capitalists, especially when they’re leading a round, will take a board seat. So, if you want ultimate control in the business, meaning you don’t want external people to be on your board and have big pieces of equity where they can influence the outcomes, then also do not take venture capital.”
How many slides should a pitch deck be?
“Never bring a 50-page pitch deck. I want nothing to do with that, and also it shows me that you can’t prioritize the information that’s important. I would say 10 to maybe 20 slides max, no more than 20 slides.”
What should founders ask potential investors before securing funding?
“If this is a one-sided conversation, it’s not a good conversation. Meaning if they’re only talking about their business and themselves and what they’re doing, then you’re not getting the information you need.
Founders can and should be asking investors more about their fund, more about the check size, more about where they’re in their fund cycle. Because all these things are important to figure out the fit.”
The Startup Savants Podcast
Startup Savants is a podcast brought to you by The Really Useful Information Company (TRUiC) highlighting the stories behind startups, the founders who run them, and the experts that help them scale. Hosts Annaka and Ethan walk listeners through conversations with founders in a variety of industries from blockchain to beauty tech and experts guiding high-growth companies to scale.
You can find Startup Savants on Apple Podcasts, Spotify, or wherever you get your podcasts.
