Saxon, one of my partners at Florida Funders, and I were just wrapping up a podcast that we hosted with two young founders of one of our portfolio companies when they asked us if we could stay on the Zoom call for a few more minutes afterwards. Of course, we responded, “yes,” and what happened next caught me a bit by surprise. These two young men share the same birthday and parents. They are identical twins, the first and only twin brothers that we have ever invested in, and are all of twenty-seven years old. As an aside, if it weren’t for the fact that one has a beard and the other is clean-shaven, anyone would have a difficult time telling them apart. I will tell you more about them shortly. I was wondering why they asked us to stick around, and I soon found out the reason. They just wanted to thank us for investing in them and taking a chance on them back when they were little more than an idea. They wanted us to know just how much they appreciated the risk we took on them, the confidence and trust we placed in them, and how much it meant to them.
“You guys, Florida Funders invested in us when we had nothing – no MVP, no customers, no team. Really, we just had an idea of what we wanted to do. Later, Peter Thiel and Khosla Ventures invested in us, but by that time, we had a product and real customers. Not when you guys invested. We can’t thank you enough, and we wanted to tell you how we appreciate what you did for us.”
Saxon and I were moved by their sincerity and gratitude to the point where we were almost speechless, and anyone who knows us would tell you that is saying something. We were just so impressed by these two young men. How could we not be? We had just heard their entire story during the recording of the podcast, and it was pretty incredible. First-generation immigrants whose parents came to America from Puerto Rico, grew up on a farm in South Florida, started their first company in college, and then, COVID hit and crushed their dream. They dropped out of college to start this company, having learned from their first startup that there was a big opportunity to disrupt the way trucks and fleets obtain insurance. Starting from nothing three years ago, they now have more than 3,000 customers running their software and over $30m in ARR!
I know most of our founders appreciate what we do for them, but the way these two founders expressed it to us was something special. It took us a while to get over the amazement, respond to the twins, and express to them how much what they just said meant to us. After we got off the call and said our goodbyes, I turned to Sax and said, how can you not just want these guys to succeed? I would be pulling for them even if we had nothing invested in their company. I hope they crush it, that their company is wildly successful, and that they end up on the cover of Forbes someday.
We have invested in nearly one hundred portfolio companies. I can’t think of another founder or founders who showed as much gratitude and appreciation towards us. Don’t misunderstand me, we have plenty of founders who appreciate us and I know they value our investment in them and all the other things we do for them–which, in most cases, is significantly more than providing funding. Many of these founders thank us and give us huge kudos for helping them. I just have never heard any founder express their gratitude as sincerely and earnestly as these two brothers.
On the other side, we do have a few founders, and they are by far the minority, who make us feel like they really don’t appreciate us or their other investors at all. Their attitude is quite cavalier. They feel no obligation to us or their other investors. It’s as if they did us a favor by accepting our money. I guarantee you they didn’t feel that way when they took our money. Somewhere along the way, they became jaded to us and their other investors. Believe it or not, I even heard from one founder that the reason her company failed was because we and the other investors didn’t invest enough for them to succeed, and she had raised and gone through over $10m! We, like most VCs, look at over one hundred startups for each one we actually invest in, and we tell our founders this when we invest in them. We want them to feel special because they really are to us. After all, we passed on 99 other companies to invest in them.
My partners at Florida Funders and I invest not only our own money but, like all VCs, we also invest on behalf of our investors, and we are extremely grateful to them for the trust and confidence they have placed in us. We feel a tremendous obligation to proactively communicate with them on a consistent basis as well as return their capital with the highest possible returns.
I was thinking about this a bit further, and for a very long time, I have believed in the power of having an “Attitude of Gratitude” about as much as possible in life. Everything I have ever read about happiness almost always starts with how important gratitude is to finding true happiness. It turns out, apparently, it’s not so much about what we have, but how grateful we are for what we have that truly matters. I was wondering, what if we had some way of measuring founder gratitude? Would it correlate in any way with company performance? Are founders, like our twin brothers who are extremely grateful to their investors, more likely to be successful than peers who lack gratitude? I have no real data on this, but I would be willing to bet they are.
I would add one more measurement to go along with this gratitude measurement concept: communication. There is an old saying, “no news is seldom good news.” It has been my experience that this holds especially true for founders. Our founders who communicate with us often and openly tend to be our best performers. The ones we never hear from until they need more money or want something tend to be our losers.
So, if you are a founder, and I have been one most of my life, I think there might be a “founder hack” here. Try to always be grateful to your investors, especially the early ones, who took the biggest chance on you, and communicate with them proactively and consistently. My guess is that, most probably, your chances of success will go up, and I would be willing to bet your journey will be a happier one, no matter the outcome.
By the way, those two brothers we invested in early at a valuation of $3m just raised $35m at a valuation of over $300m, over 100x the valuation we invested at– and get this, they accomplished this in just three years. Are they the exception or the rule? I don’t know, but maybe there might just be something to this gratitude stuff.
Learn & Grow, tom
Watch our Skin In The Game Podcast interview with Lula.