General Catalyst has made early bets on some of the biggest companies in tech today, including Airbnb, Lemonade and Warby Parker.
We sat down with Katherine Boyle and Peter Boyce, who co-lead the firm’s seed-stage investments, to discuss what they look for in founders, which sectors they’re most excited about and how business has changed in the wake of the COVID-19 pandemic.
This conversation is part of our broader Extra Crunch Live series, where we sit down with VCs and founders to discuss startup core competencies and get advice. We’ve spoken to folks like Aileen Lee, Mark Cuban, Roelof Botha, Charles Hudson and many, others. You can browse the full library of episodes here.
Check out our full conversation with Boyce and Boyle in the YouTube video below, or skim the text for the highlights.
Which personality traits are most important in founders
Katherine Boyle: I look for what I would call this obsessive trait, where they are learning more about the regulatory complications, where they are constantly trying to figure out how to solve a problem.
I’d say that the common theme among the founders that I support are that they have this sort of obsessive gene or personality, where they will go deeper and deeper and deeper. When we invest in these companies, it becomes very clear that they often have sort of a contrarian view of the industry. Maybe they are not industry-native. They come at it from a different perspective of problem solving. They’ve had to defend that thesis for a very, very long time in front of a variety of different customers and different people. In some ways, that makes them much stronger in terms of the way they approach problems.
Peter Boyce: I think the first would be being magnetic for talent. It ends up influencing the speed of learning and development. Really incredible founding teams that can be magnetic for talent and learning just kind of spirals out of control in really good ways over time. I really look for the speed and the sources of learning. And can folks be really intentional? Can they get the right set of advisors and teammates around them?
The second would be the personal connection to the problem space. It’s like there’s this kind of deep-seated source of energy and fuel that actually isn’t going to run out. Catherine and I’ve been lucky to work across a number of different particular thematic areas, but the thing they have in common is just this personal connection to how and why their business needs to exist. Because I just think that that fuel doesn’t run out, you know what I mean? Like, that’s renewable.
On fundraising and building trust remotely
Boyle: If you’re someone who’s comfortable presenting on Zoom, making connections on Zoom, or using Signal and using Twitter and being very online, then I 100% think that you can make investments, build community and build connections through digital worlds and digital platforms. If you really like that in-person connectivity, then you might consider staying in a tech hub, or you might consider sort of these distanced walks until things go back to normal. Boyce: Video calls just collapse time and space in a way that has freed up more efficiency and collaboration. Katherine and I have looked together at more companies in the last few months than the prior few years. So that’s been really exciting for thinking about the way teams can kind of collaborate in our industry together. I think we are all finding proxies for trust over Zoom. One of the things that I’m paying a lot of attention to is just transparency.
For example, doing a screen share and hopping into company operating documents. That kind of transparency makes it feel like we’ve known each other for a long time, or that we could know each other for a long time.
Exciting sectors to invest in next year
Boyle: The overarching theme that I’m looking at every company with is through the framework of the decline in institutional trust. There are just a lot of questions around whether we can rebuild some of these broken institutions. When you see the decline in consumer trust and around a lot of civic issues, it makes me think that there’s a true civic vertical that’s about to be built. Realizing that this year was really hard on most Americans, that’s going to be the focal point of a lot of founders going into the 2020s.
Boyce: I’ve been thinking about tools. What is the next wave of picks and shovels for us individually? I think our relationship to software is that it’s meant to be at our service to improve our lives. So, I’m using that as a lens. I’ve been thinking about that a fair amount recently, and the ways in which that kind of makes itself manifest. So that is, that’s where I’ve been noodling.
Will consumer social heat up again?
Boyle: I think we’re just going to see smaller communities. I think that the era of broadcast, of the retweet button, of everyone seeing everything that you think about the smallest and largest things, has become really dangerous, and really problematic. In a world where we’re asking these large institutions to basically put warnings on information about our election, that’s not the world that I think most consumers want. I think things are going to get smaller.
You can build trust in small communities. It’s hard to build trust in large communities. That’s what we’re seeing with the movement to Signal and the movement to smaller platforms that allow for much more curation. That’s one area where I think you can build trust. If I were a founder really looking at consumer social, that might be a question I would ask myself.
The acceleration of venture deals
Boyle: First, there’s never been more capital in the market. It’s never been easier to build a company. It’s always difficult to build a company, but the number of tools that are now available for remote teams to just launch a product. We’re now seeing this incredible acceleration, where it’s sort of a perfect storm of very cheap capital, a lot of investors and a lot of people who want to become founders and who have more tools and kind of more problems to go after than ever in history.
When should founders reach out to GC?
Boyle: We like to say it’s never too early. Peter and I co-lead the seed platform at GC. There are definitely people who are working at companies that we start engaging before they even have an idea. So it’s never too early. I think setting the expectations from the founder perspective is the most important thing to do. Set those expectations.
The last thing you want is to tell a venture firm that you’re coming in for investment when it’s clear that you don’t even have a slide deck or an idea. But if you come in and you say you’re thinking about X, Y and Z, and you’re really interested in the space, and here are the things you’ve learned, or the memo you’ve written in terms of research, there are a lot of firms that will engage at that point. We like to engage with smart people as early as possible.