Rally | Deep Dive with Michael Tam of Craft Ventures
The Brooks Brothers Gold Prize, Walmart's Open Call 2024, and more!
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Investor Spotlight: Michael Tam from Craft Ventures
We are honored to spotlight Michael Tam this week, Partner at Craft Ventures. Craft invests in B2B software companies, and the firm maintains a “for founders by founders” approach. Prior to joining Craft, Michael previously was an investor at Crosscut, managed Uber’s business in Southern California markets, and helped start a B2C e-commerce business later acquired by Procter & Gamble. He currently serves on the investment committee of the USC Marshall Fund, which invests in startups in the Southern California tech ecosystem.
What types of startups do you typically invest in, and what do you look for in a potential investment? How do you determine whether a startup is a good fit for your portfolio?
Craft is sector agnostic, leading seed to growth rounds with checks from $1m to $50m. And while we’re mostly b2b focused e.g., SaaS, marketplace, developer tools, fintech, we do invest in b2c models, typically marketplaces.
How we evaluate fit for the portfolio varies by stage but generally, it’s getting to conviction on narrative and signals that align with the narrative. Some examples of narrative include founder market fit, unique distribution, clear thought process for the why now and near term GTM. We’re a team of former founders and operators mostly in SaaS and marketplaces so we love jamming on various sales motions, PLG ops, customer success tactics, and scaling marketplace liquidity. Some examples of signals to align on narrative include often discussed metrics (e.g., net new ARR growth, retention, sales and capital efficiency, more here), off-sheet references, strong product demos, and pipeline.
What inspired you to become a venture capitalist, and what motivates you to keep working in this field?
I stumbled into helping start an ecommerce startup, L, which P&G acquired in 2019 for $100m. The founder, Talia Frenkel, was a Red Cross photojournalist with a clear vision and tenacity to see it through. I appreciate
d the mission to build a startup with an impact and wanted to bet on her. So I got involved on day one for the first few years, from incorporation to generating sales online and in stores such as CVS. And I became enamored with the ambiguous journey of building in the early stages while navigating the trenches with a mission-aligned founder and team. It wasn’t smooth but the process was inspiring. And venture just happens to be the vehicle that allows me to hone this craft.
What advice do you have for founders who are raising?
Find your version of balance as I don’t think there’s one singular way to raise. You’re juggling your vision with the fundamentals and near term business needs. You’re navigating the need to be heads down with being external facing. Heads down entails all things company building. External facing entails positioning the company to hire the best candidates and ensuring the business is well capitalized. These converge to setting your company and team up for success but take different muscles (and bandwidth) so find your version of balance.
For example, you might prefer to stay in touch with a small group of investors you think could be good potential partners. So you get customer intros, share hiring needs, hear their approach, talk about the market. Tactically, this might mean a check in once every 6 months or managing versions of external investor updates (Craft company Cabal is a great tool for the latter). Or you might prefer to stay heads down and meet investors only once ready to raise. Tactically, this would mean running a tight process, prep an investor list, deck, and data room (metrics, financials, recorded product demo, pipeline). And then relying on your network for warm intros and backchannels.
Who are some stellar API founders and their startups we should look out for?
Chen Li at Palmstreet - live shopping marketplace starting with plants, pottery, and home goods
Daniel Liem at Gentrace - modular system for the life cycle of product development with LLMs
Jay Khatri at Highlight.io - open-source application monitoring
Jessica Ouyang and Jolena Ma at Ditto - content design system starting as single source of truth for product copy
Katharine Lau at Stuf - next-generation self-storage delivering tech-enabled storage to consumers and businesses
What advice would you give to aspiring VCs who are looking to break into the industry, particularly those from underrepresented backgrounds?
Do the work, go the extra mile, and say yes more often.
What I mean is put yourself out there, find ways to meet interesting founders and operators at startups you like, work at startups you find compelling, find your spike in helping founders and leaders, organize people around relevant themes, research and write about topics you’d love to dive into understanding.
In parallel, meet with investors and learn what they focus on when investing e.g., do they lead vs follow, what ownership/check sizes do they target, understand their portfolio, how do they weigh fundamentals with narrative and how does this vary by stage if they’re multi-stage. This isn’t exhaustive but there are multiple ways to “do the work,” which will then put you in the flow of investment opportunities and build your context as you cultivate relationships. In doing so, you ultimately (ideally) have a good handle on when these startups are fundraising and you can easily help by setting them up with the right investors.
And in the process, you’ll more naturally get to know the context of the job and the culture and decision process of firms which will help you find opportunities in venture.
Upcoming Gold House Network Opportunities
Join our Gold House Futures Network – a curated community of the most promising next-gen API creatives, entrepreneurs, and social impact leaders! By being part of the network, founders receive:
Amplification: Members of the Futures Network receive resources from Gold House’s corporate and cultural leadership network to accelerate their ambitions.
Collaboration: From business partnerships to soundtrack inclusion, Futures gain access to collaboration opportunities both within the network and with industry leaders.
Community: Exclusive events and curated programming cultivate a community of founders and creators.
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Recent Gold Wins
Gold House and Brooks Brothers have collaborated to award 5 groundbreaking female entrepreneurs in art, fashion, and design with mentorship, amplification, and (for one winner) an unrestricted $25,000!
We participated in the seed funding round for AfterHour, a financial community supporting traders at every level, through collaboration and transparency, to better their skills. You can learn more about AfterHour here.
Immi has collaborated with Disney and Pixar’s new movie, Inside Out 2– you may learn more here!
Impact Food launched their new plant-based salmon on World Oceans Day! This product is designed to deliver the rich, savory taste and tender texture of animal salmon while being environmentally friendly.
What’s Popping?
Walmart’s Open Call 2024 is happening soon – this is a perfect opportunity for founders interested in being a supplier for the world’s largest retailer! You may pitch for both in-store and online placement at Walmart or Sam’s Club. If you are interested in joining, the application deadline is July 15th. Selected participants will then be able to join the Open Call event, which will take place on September 24th and 25th. Open Call attendees will have the opportunity to pitch their products to Walmart and Sam’s club merchants, and meet business leaders from Walmart along with other special guests during mentorship sessions. You may access the application here.
Ideas? Questions?
Let us know in the comments below!