Tony Conrad on Being a Founder and an Investor, Vetting, and Deal Flow

“The best investors I know are people that have actively founded something themselves.”

— Tony Conrad

Entrepreneur and investor Tony Conrad has had success on both sides of the table as an investor and a founder. “I was kind of part of both of those roles. It was very, very fluid. Some people saw me as a venture capitalist, some people saw me as a founder,” says Tony. Having built About.me and Sphere from the ground up and as the co-founder and partner at True Ventures, Tony knows what it takes for a founding team to succeed, and he has applied this knowledge to lead True Ventures in over 200 deals.

Tony joins Cory Levy in this week’s episode of the Spearhead Podcast to discuss his approach to investing, tips for new angel investors, deal flow, and what he looks for in fellow founders.

Like all investors, Tony misses opportunities and bets on companies that eventually fail, but this isn’t something that keeps him up at night. “Where I get really upset is when I feel like we’ve made an investment into a founder, which is what we do, and we got that wrong,” says Tony.

When looking for an entrepreneur to work with, Tony tries to connect with them on a deep level. “I like to really try to make a human connection, and try to understand what makes a person tick, where they’re from, what they’ve been through, what’s their journey here, and why they’re doing the particular idea,” says Tony. While Founders are focused on their presentation and trying to convince Tony that their business is worth investing in, Tony focuses on them. “At times I’ve very politely leaned over the table and closed their laptop, and just asked (them) to take a step back to give me their context and for me to understand how we got there. It changes everything when you can get into that.”

Building Out Your Network

When it comes to Tony’s deal flow, he considers every company he’s worked with as a possible source, and constantly works to strengthen his network. “I think if you are a little bit patient and you carefully build out your networks, in addition to your own experience, you put yourself in a much better place to have top-of-funnel deal flow that is going to be of higher value, higher quality, and higher chance of succeeding,” Tony says.

To cultivate a valuable network, you don’t need to always look outside of it according to Tony, who met WordPress Founder Matt Mullenweg from friend Om Malik.

“I think it’s really, really important that you tap into your existing network as opposed to trying to always looking outside of it. If you do within that network of great founders and entrepreneurs, you’ll get an enormous amount of deal flow. It’s always the best deal flow because founders, they have an intuitive sense of what’s appropriate for me, for us at True Ventures. They’re just going to do a prescreen in a way that’s much more effective.”

Tony says a “hack” that he would recommend to young angel investors is to “Get to know people in the network when you don’t need anything from them and make sure that you keep a list and you do check-ins, and that you’re proactively generous and that you’re sharing deals.” Tony recommends short check-ins and phone calls, even if 5-7 minutes for a cup of coffee or stopping by the office for a brief chat, which can make a big impact when building out your network for partnerships.

Don’t miss the rest of this conversation with Tony Conrad of True Ventures on the Spearhead Podcast. Listen here

In the interview, Tony Conrad and Cory Levy talk about:

  • How Tony got his start as an investor
  • Determining whether or not Tony will work with a founder
  • Saying no
  • The difficulty and benefits of being both an investor and a founder
  • And more!

Show Notes

  • Cory Levy and Tony Conrad start their conversation by talking about Tony’s first investment, which was in a company called Danger (1:23)
  • Cory asks, “If you could go back to Tony Conrad 20 years ago, what would you tell your earlier self about investing?”
  • Tony discusses first meeting Matt Mullenweg, Founder of WordPress (3:01)
  • “I think it’s really, really important that you tap into your existing network as opposed to trying to always looking outside of it” (5:45)
  • Investors rely on having “high-quality deal sources.” Tony discusses who his sources are at (6:29)
  • Tony isn’t a traditional investor due to his involvement on the operational side of companies as well, but that’s changing. Tony discusses what he’s learned from being both a founder and an investor (8:18)
  • “There’s just so many real-world small lessons I’ve learned along the way by being an operator or being a board member that applies to the other category” (11:30)
  • Savvy investors learn and adapt as they grow in their craft. But when Cory asks if his decision-making process has changed over the last 20 years of investing, Tony says no. Hear why at (13:26)
  • How Tony decides if he wants to work with a founder or not immediately (15:19)
  • Cory and Tony discuss how to conduct diligence as a new angel (20:32)
  • How Tony says no to founders (23:16)
  • “Generally, they are fairly well thought out opinions on our end and we share the top line rationale around that” (24:00)
  • How new angel investors can get in on deals with True Ventures (24:22)
  • “The best investors I know are people that have actively founded something themselves” (27:47)
  • Cory and Tony discuss diversity in entrepreneurship and investing (28:30)
  • “What’s the last weird thing you saw or invested in?” Cory asks Tony (33:24)
  • Show close (34:52)
Tony Conrad on Being a Founder and an Investor, Vetting, and Deal Flow