Kai Bond is a Partner at Courtside Ventures is a leading venture capital fund focused on early-stage sports, fitness, and gaming companies. Before becoming an investor, Kai started three companies of his own, so he has great insights from both the founder and investor perspective. Last week Entre and Charlie Stephens, of Leaders Live, got to speak with Kai to hear his thoughts on investing in the current environment and tips for entrepreneurs looking to raise capital. Below are some of the key takeaways that entrepreneurs should take note of if they are seeking to raise venture capital. For more events like this one be sure to check out our events page for all future events.
Are investors investing during COVID-19? How are you and your partners looking at the current situation?
Kai says Courtside Ventures is still investing, but as for other investors, it depends on the fund. It’s essential as a founder to do your research before speaking with a venture fund to understand where the fund is in its life cycle. It’s vital to look at the recent deals that the fund has closed to give you a sense of whether they’re investing in new contracts or not.
There are trends in the market that have accelerated due to COVID-19, like e-commerce, distance learning, gaming, home fitness, and streaming media. Some of the verticals that Courtside Ventures invests in are exploding like gaming and home fitness. Some of the other areas of the market have much uncertainty, like sports, but they are optimistic about the future.
What’s your qualification process for evaluating startups? At what stage are you looking to invest?
Courtside Ventures typically invests in the seed stage when the company has some traction, a finished product, customers, and some revenue.
If they invest in an earlier stage, they look more at founder fit and value repeat founders with expertise and gained insights from personal experience.
What are some essential traits or core characteristics that you look for, especially for first-time founders?
Coachability is a big factor. Kai will often ask founders about their hobbies and how long it took them to master them because he believes entrepreneurship is like learning a craft.
He also looks at their resiliency, which plays an especially important role in situations like we’re facing today. He’ll consider whether they’ve founded a company before, if they’ve bootstrapped it, or if they’ve experienced challenging life experiences and have an underdog mentality.
And lastly, they look at a founder’s level of passion for the business. Venture capitalists want to know why a founder is interested in a particular problem and what will drive them to power through when things get hard.
How do you help founders evolve?
Kai says they take a mentor-driven approach by pairing up founders with others in their network who have experienced similar challenges. He says they’re not overly prescriptive, like suggesting books or other resources because the best way to learn is by doing.
Do you have mentors? What’s the key to finding the right mentors?
Kai says he has three mentors who are at different stages of their careers, and all bring varied perspectives. It’s critical to have a variety because you’ll need guidance in many aspects of your entrepreneurial pursuit.
One of the critical aspects of a good mentor is to find someone who is objective. They shouldn’t have any financial incentives in what you’re doing. They need to have your best interest in mind, independent from a business objective.
Another thing to consider is: why does this person care, and why should they take time out of their day to be a mentor? Likely they want to enhance their knowledge within a certain area. It shouldn’t be one-sided. It’s essential to be able to give something back to your mentor.
How do you keep in touch with your network?
Kai says he categorizes his network into buckets based on what relevant knowledge or insight they can bring to the table. He meets with 400-500 founders per year and to keep in touch with the founders he believes have potential he creates a time structure like the following:
- Monday is for the partnership
- Tuesday through Thursday is for new deals and networking
- Friday is for portfolio companies
What’s the best method to get in touch with Partners at Courtside Ventures?
Do you look for collaboration opportunities? What would you be looking for?
Opportunities that help the portfolio companies come first and foremost, like introductions to strategic partners, for example.
Courtside Ventures are thesis-driven investors that look for people who fit into their thesis or are the complete opposite so they can get different perspectives.
Ideally, they’d look for people who have a vision and can articulate a plan for 5 to 10 years down the road. Kai says that helps him determine whether someone is building a larger company or just has a nice product.
What’s your thought on sports tech in the future?
Courtside Ventures doesn’t invest in sports tech businesses, but rather focuses on sports media. Kai believes that people are yearning for sports content and that the connection and community around sports will remain strong through the pandemic.
What do you recommend for getting started as a diverse founder?
Another method for finding the right fund is to research their investment thesis and look for funds that have a complimentary diversity and inclusion policy.
Reach out to Kai as he has a strong network of funds that focus on investing in underrepresented founders. He admits it’s still a hard road but is willing to help make those connections.
How did you get the initial capital for your first business?
Kai bootstrapped his business, Switch Games, with $20k. From there, they got seed capital from high net worth individuals who were interested in the category rather than institutional investors.
A unique tactic to use today would be to identify the top individual investors in your category and try to connect with them. High net worth individuals with expertise in your area may be willing to invest, which is a strong indication that you’re on to something. They also have great networks.
What do you recommend when you need funding in-between building your prototype and launching?
There are funds dedicated to intermediary investments, but the best thing you can do is continue to reach out to your investors to keep them up to date on the progress you’re making. Venture capital is a relationship business. Even if you’re not going to get money from them now, keep top of mind; they may invest in the future.
What’s your mantra or ethos?
If you do what you love and keep working hard, success is inevitable. When things get hard, you can persevere if you’re passionate about it.