The following interview is a conversation we had with Kirby Winfield, Founder of Ascend VC, on our podcast Category Visionaries. You can view the full episode here: Founding GP at Ascend VC
Kirby Winfield
Hey, Brett, thanks for having me. I’m stoked for it.
Brett
Yeah, no problem. So before we begin talking about what you’re doing there at Ascend VC, could we just start with a quick summary of who you are and a bit more about your background and really just how you made your way into the world of venture.
Kirby Winfield
Yeah, yeah, sure. So I’m a Seattle kid, born and raised, went back to east for college in the, graduated in 1996, moved to Manhattan thinking I was going to have a career in advertising. And when I say advertising, I mean like Mad Men style advertising. And got a call from a friend about three months after I moved to Manhattan and he was in Seattle and he said, I’m starting an internet company, can you come help me? So I moved back to Seattle, took over marketing for this fledgling startup and we took it public a year later and it became one of the top 20 destinations on the web. By 1999, it was a $4 billion company and I just kind of tripped and stumbled into it really. And it was a very forgiving time to be in the market. So I made a lot of mistakes but learned a lot and yeah, lived through the.com boom and then the.com bust.
Kirby Winfield
So we started another company in 2003, took it public in 2004, and then I left that company in 2009, took over a venture backed startup that had raised $18 million. Quickly found out that it had raised that money on some pretty bad traffic on an ad network model. Had to do a hard pivot, layoff two thirds of the company and recapitalize it. That was my introduction to Venture. So I spent like six months on Sandhill Road just marching back and forth, talking to 100 VCs, trying to get one of them to come in and save the deal, and eventually got a couple of folks to the finish line. The investor at the time, Draper Fisher Jervitson, decided to do the recap themselves and we ended up having a good outcome. Actually sold to ComScore where I ran Corp Dev for exactly a year and a half and then did one more startup as an operator.
Kirby Winfield
We started a company in the travel space that we then raised a couple of million dollars from Maveron and Version One Ventures and we sold that a year later to home away and then sort of a 20 year career in startups as a founding team member or a Founder. And what I realized was the companies that I didn’t run did much better than the companies I ran. So I realized I was probably best suited for finding the right folks to bet on and figured that maybe instead of betting my career, I would bet money and so started investing off my own balance sheet as angel in 2016. At the same time had an old friend and colleague who was running Paul Allen’s Institute for Artificial Intelligence, and he asked me to come help them as an advisor spin out their incubator program. So I did that in 2017 and then in 2019 had enough sort of good fortune as angel investor that I had some LPs get interested and ask if they could anchor me in a fund.
Kirby Winfield
So I raised fund one for Ascend VC in 2019. That was a $15 million fund. And then now we’re on fund Two and we write precede checks into software startups. We’re pretty much a generalist VC. And yeah, I’ll tell you that, I don’t know that I ever had personal product market fit for anything I did before VC. And so I wake up every day feeling really lucky to do this job.
Brett
Nice, that’s amazing. And when you started making angel investments, did you always know that you were going to raise a fund or was the plan originally just to do angel?
Kirby Winfield
Yeah, that’s a great question. So I had to kind of after 20 years of startups, I was in pretty bad shape physically, psychologically, startups will beat you up. So I did kind of a reset of my life in 2016. And particularly what I tried to do was rather than go and try to chase sort of the next big thing, I just tried to set out what questions I wanted to answer for myself. And so in the first year of angel investing, the question that I really wanted to answer was, do you like meeting a lot of founders and trying to help them and doing that every day, all day, and doing that even when you’re not going to invest in them? Do you like the work? And after I found that I like the work, the next question I had was, do you think you can actually pick good startups?
Kirby Winfield
And spent a year or two working to see if I could do that and looked like I could. And only then did the question arise like, okay, do you think you would want to do this with other people’s money? And that question, like I said, got answered. I had some good fortune having done a bunch of startups. I put people in my network into those startups as investors and they did pretty well. So I had that advantage of folks kind of being willing to just take a bet on me as a fund manager that made that question easier to answer. But no, it was never the goal. It was more of a process of just discovering that this is the passion, this is what I want to do with my life. And then again, having the good fortune to, I think, help some founders early on who ended up doing good things.
Kirby Winfield
That led me to have the opportunity to raise the fund and kind of.
Brett
Mental framework of asking yourself a question and then pursuing it until you get to answer. Is that something you continue today? And if so, what’s the big question? What’s on your mind today that you’re trying to answer for yourself?
Kirby Winfield
Yeah, it is a framework I try to apply every year. Now, again, rather than kind of having we do a strategic planning cycle sort of informally with the fund here every year. But really it boils down to, yeah, what is the question that we want to answer for ourselves this year? And I think this year so it’s interesting being two funds deep and having 70 plus investments and having had folks in the market start to recognize us as a value added investor. And sort of we throw this annual party now for all the founders in the Pacific Northwest and 500, 600 founders show up, and we’ve got all these kind of interesting things happening where you could start to say externally that you’re building a brand. And so the question we’re trying to ask this year is, like, what do we do with that? So we’ve built this momentum, we built this brand for Ascend VC that I think is hopefully synonymous with being a really Founder friendly, value added precede investor that can help you get to the next stage.
Kirby Winfield
But it’s sort of like, if you’ve done that, then what do you do next? And so I think for us, I think we’re learning to double down on the things that we like and we’re good at and to not try to do things that we don’t like or we’re not good at. An example. So there’s a great investor up here in Seattle named Yohai Nakajima with Untapped. He’s a world class software engineer, and his Mo has been to build in public, just experimenting with new technology. And so he did it with Web Three pretty aggressively, and he’s been working with generative AI now in public to build tools to make him a better investor. And it’s fascinating to watch. If I’m not careful, I can get jealous and I can start to think, how do I gosh? How can I compete with that? How can I become more like Yohe?
Kirby Winfield
Because he’s clearly in the room with amazing AI founders, and we invest in AI and have for a long time. How can I teach myself to be a software engineer? And of course, that’s absolutely the wrong question, right? Like. The question I should be asking is how can I lean into what I do and what I enjoy and what I think makes me unique and what our founders clearly appreciate so that I can be the best? Investor I can be the best, Kirby. And not some third rate yohe and blame, you could say, for investors like Semilshot Haystack and Tish at Box and Mark Sugarman at MHS and all these incredible solo GPS that I kind of look up to and just have to remind myself that the question I should be asking is how can I better at being me and not how can I try to be more like them?
Kirby Winfield
Which is hard when you’re naturally competitive. And I want to win deals, and I want to be esteemed in that same way that these other investors are. And just reminding myself that the path to that is doing more of the AMAs that we do for our founders with really successful go to market leaders and sales leaders and public company founders and connecting our incredible LPs with our founders and throwing lots of parties. I like throwing parties. I’m a recovering DJ, so I’m all about building community. And we do a lot of content on the website where we expose maybe investors who founders haven’t heard of or couldn’t otherwise find, and we highlight our own founders. And we built this toolkit that people rave about that’s just kind of an amalgamation of things I wish I had when I was a Founder. And so you just kind of go in and try to double down on those things.
Kirby Winfield
So that’s a long winded answer.
Brett
Hey, we like long winded answers. Now let’s talk a bit about the portfolio companies. So looking through the list, there’s some really impressive names there. Knapsack. We actually had them on the podcast a couple of months ago. That was a really fun episode.
Kirby Winfield
Yeah. Love Chris.
Brett
Yeah, Chris is great. And then Crowdcal, were talking about that in the pre interview. I’m a longtime customer. I think I’ve been using them for probably about two years now. So those are two cool companies there. But are there any specific companies that.
Kirby Winfield
You want to highlight?
Brett
Any that you think our listeners will have heard of? Any really fast growing ones that are just getting a lot of attention right now? Sure.
Kirby Winfield
I mean, look, we’ve got actually one of my best friends and former colleague Pete Christophulu, the Founder of a company called Zembly and fund One at Xembly. And they are the AI driven chief of staff for every knowledge worker. They’re on fire. Doing phenomenally well. Pete’s an outstanding Founder is technical Co-Founder Jason Flax. Holds a bunch of patents in the voice AI space. And they’ve really honed in on this way of looking at the opportunity for AI to change the daily work of knowledge workers in a way that’s really fascinating. There have been hundreds of sort of apps that are out there that can help you schedule your meetings or take notes on your meetings. Right. That’s not novel. But the idea of giving every person a chief of staff, that really resonates. And it’s about more than notetaking, and it’s about more than agenda setting.
Kirby Winfield
It’s really a fascinating product. And at the same time, Pete’s been just really smart about his go to market, really smart about and I always tell other founders, doing bottom is up. SAS just knowing who that ideal customer is initially and just being hyper focused on finding those people, because those are the people who are going to use your product every day. Those are the people who are going to tell their teammates about your product in that company. We did the precede, lightspeed did the seed, and then Norwest just led a $15 million series A, and they’re off to the races. So that one’s really exciting. Other companies folks might be familiar with we’re investors in Wrench. Wrench is quietly the world’s largest auto repair marketplace. I think they’re on series D now.
Brett
I think you said it was 70 something companies, right. Or 70 plus so far. Investments.
Kirby Winfield
Yeah, I think that’s about right, give or take.
Brett
Wow. So I’m guessing your days are spent, then, speaking with founders.
Kirby Winfield
My days are spent speaking with founders, yeah. founders who we want to invest in, founders who we don’t know if we want to invest in, and founders who we’ve already invested in. And when I get a spare minute to breathe, they’re also spent with founders who’ve actually invested in us. Most of our LPs are actually ex founders themselves. We do work with our LPs pretty actively, and then, of course, co investors and downstream investors, as we now have a lot of the companies that we do precedes and that get funded in the valley in later rounds. And so maintaining and growing those relationships is really important as well. But certainly the most energy I get is from talking to founders. But it is the constant battle to try to figure out how to make sure that I’m really surgical with how I use my time to help our founders.
Kirby Winfield
It doesn’t scale as a solo GP whose sort of competitive edge or value add is like working with founders. It doesn’t scale to do that unless you’re really thoughtful about how you do it and how you get leverage on your time. And so I started by just taking recurring meetings with every Founder we invested in, which worked until we had about 50 founders. Then I realized I was spending 60 hours a month on zooms with founders. And I didn’t need to be right, because half of those folks probably didn’t need to meet with me. Some percentage of them only needed to meet with me around fundraising, or only needed to meet with me around go to market. So we started trying to do a better job of just understanding where people were in their journey and meeting people more where they’re at versus kind of trying to cram everyone into this sort of mandated check in mold.
Kirby Winfield
And we try to graduate folks out. So when we first make an investment, especially for the only institutional investor, which we are a lot of times, those obviously we want to stay really close to and just make sure that we’re there to support founders as they kind of get the thing off the ground. And those will be weekly or biweekly check ins for the first period of time. Once folks get to their seed and they’ve got hopefully a strong institutional investor in the seed, that’s where we can kind of step back a little bit and be more reactive. And then once it’s the Series A, that’s almost like where I’m able to really just do the things that I think are valuable and not try to be everything. I feel like early on, you’re trying to be everything to every Founder, and I’m not really good at everything.
Kirby Winfield
And so I sort of like it when I can fall back into the mode of saying, okay, what I’m really good at is being a super connector. I always joke about I’ve got the distinct advantage of being old, so that just means I’ve got a pretty strong network. And by virtue of having done a lot of interesting different things, different roles in different companies, in different geographies, I can be really helpful connecting the dots. And so getting to be in that mode or getting to be in the mode of trying to be really thoughtful about marketing as I’m a recovering marketer, that’s kind of the goal is to get to that place where I can be a little more specialized and a little less in the weeds, I guess.
Brett
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Kirby Winfield
I think the most consistent advice I’m giving people is no matter where you are in your fundraising cycle, you need to be building relationships with your next round investors. It needs to be a work track for you as a Founder it needs to be like a meaningful portion of your time. Some founders like that. Some founders really hate it. But the fact of the matter is, 95% of your fundraise work is going to happen before you actually press go on your fundraise. It’s just the way that it used to be ten years ago, five years ago. Even. Raising money is supposed to be hard, and I think people kind of forgot that for a period of time. But if you haven’t built a list of at least 100 funds, that could lead your next round with detail around the partners that you think are going to be the person to talk to with that fund and what investments they’ve made and why they might be a thoughtful investor in your round, and then creating reasons to actually meet those folks, get the right intros to those folks, and then have a casual, long term approach to just getting to know them as humans and sharing so that they can understand, organically, what your vision is for your company and see organically how you execute against that vision so that they’re just waiting for you to raise or they disqualify themselves by not being interested and not taking that next coffee meeting or whatever.
Kirby Winfield
And that’s fine, but that’s how you’re going to get your roundup. It’s no longer like you’re going to walk in and run a four week process and get three term sheets. The companies that can do that will do that, but the numbers will show you that if I’m invested in 20 companies, maybe one or two, hopefully three or four can get that kind of round done, but in this environment, you just can’t assume that’s going to happen.
Brett
Yeah, that makes a lot of sense now because you’re investing precede that’s obviously super early stage. So two questions on that. What’s the average deal size for you? And then what are you really looking at when you’re evaluating a company that is precede that is that early? What are you evaluating to determine if it’s a deal that you want to do?
Kirby Winfield
The round sizes vary from, like, probably 1.5 million is the average round size. And typically, we’re raising that money to sort of get a pilot or sort of first version of the product built and get that done with some design partners or get some initial market feedback for it and then iterate on it, right? And maybe bring on a couple of founding team members and then make that qualitative progress so that you can go raise your seat.
Brett
So what are you evaluating based on? I’m guessing at that stage, they typically don’t have a product yet. Is it more just a founding team with an idea?
Kirby Winfield
Yeah, well, they increasingly do have a product. Maybe a year and a half ago they didn’t have a product because we had to be napkin stage investors or else someone would throw $5 million at them. So I’m happy to say that we’re definitely more post product than were two years ago. We’re largely still pre revenue, but the evaluation is the same. It’s always the same. Like it’s team. And is this someone with a unique insight about the world, like an unfair advantage and an ability to execute to make that insight into a sort of dominant market position within the next decade? And increasingly, is storytelling a superpower? Can they raise money? Can they hire people they shouldn’t be able to hire? Can they get press they shouldn’t be able to get? Can they sell contracts they shouldn’t be able to sell? I mean, that’s about some sort of ineffable quality of a Founder that it’s our job to identify that because you say, like, well, is the product built or not?
Kirby Winfield
Usually this is the hardest thing for founders to understand. The product isn’t. And Elon Gill wrote something really interesting about this the other day with regards to this ubiquity of sort of generative AI startups. And it’s easy to get cynical. And he said, look, it’s not about the product because there are five teams that are going to build the same product no matter what you’re building, right? And at least five in a hot space, probably 100. It’s about your ability to differentiate that product and brand that product and build a team and compel them to go really fast and make that product better and raise money. So I kind of say on initial calls, I’m going to grant you that your product is going to be really good. I don’t know what to talk about. Obviously, on Diligence, we use the product, we make sure that it’s good and that technology is elegant and all of that.
Kirby Winfield
But when we see companies fail, it’s not because the product didn’t work.
Brett
Makes a lot of sense. Yeah, a lot of the conversations that I have with are speaking with technical founders and they seem very stuck on that idea. And their mindset seems to really just be that the best product wins. And that’s how their logical brains think is if they can just build a great product, everything else will just come together. And it definitely hasn’t been the case, I think, from what I’ve seen at.
Kirby Winfield
Least, I think, look, there’s certainly like a price of admission. The product has to be close to the best. But you just have to recognize as a Founder that there are going to be like a dozen other products that are similar, that are as good. Unless you’re splitting the atom or curing cancer. It’s probably going to be more about how do you position the product, how do you go to market and build a connection with those initial customers and understand which of the features in your product are going to be differentiated or are going to be able to sort of hook the user. And then it’s about customer success and it’s about marketing the product has to be amazing, but that’s the price of admission. You can’t just walk in with your amazing product and say, like, okay, give me a check like your product, okay, let’s assume your product is amazing.
Kirby Winfield
Now, you need to be amazing when you talk about it, and you need to have an amazing plan to get people to love it. And you have to have an amazing ability to tell a story and inspire people. So that’s kind of what we’re evaluating on.
Brett
And if you hadn’t choose just one super skill or a Founder to have, what do you think is the most important skill?
Kirby Winfield
I would have said something different two years ago. Storytelling, the ability to inspire, ability to communicate. That’s got to be number one.
Brett
And what do you see those founders who are great at storytelling, how do you think they’ve learned that skill? Does it just come naturally to them? Or do you often see them have to really set that as a focus and a goal to improve and master storytelling?
Kirby Winfield
I haven’t seen a lot of founders go from being bad at storytelling to being superlatively good at storytelling. I’ve seen a lot of founders be really good at storytelling and be very flawed at other things. So the answer to the question, I think some of it’s an eight people who are just charismatic, dynamic people. There are people who are good salespeople, by the way. You have to be careful as an investor that you don’t confuse a good salesperson with a good storyteller, because those are actually different things, as I’ve learned the hard way.
Brett
Yeah.
Kirby Winfield
And for what it’s worth, I don’t think I’m a great storyteller. I don’t think I was great at raising money. I think I tell a pretty good story about my fund now, but largely because it’s my story. And so it’s easier, I’d say it’s sort of like if you have the raw material, you can learn to do it. So think about like a great athlete who’s never played football. Give them some good coaching and some practice and put them on the field and they’ll succeed. But if you don’t have that core sort of ability, then you won’t ever see the field.
Brett
Now, last couple of questions here for you. So let’s just talk about the world of early stage investing. What do you think is going to happen over the next twelve to 18 months? What’s going to happen in this market and what’s going to happen to the VCs and just early stage companies in general?
Kirby Winfield
I think there’s going to be like a sort of dead cat bounce. So I think that there’s a bunch of money that needs to be deployed. LPs are going to be feeling a little looser, and so I think VCs are going to call the capital that they’ve been waiting to call sort of later in this year. The consensus is kind of like back half of the year, but it’s even seeming like things continue to look better, that maybe Q two is kind of a rebound and I think all that money is going to get deployed and maybe the first part of 24 is good. Then I think there’s going to be a real squeeze late 24, 25, and maybe even into 26, because I think what’s going to happen is LPs are just not going to re up at the same frequency and volume into venture funds.
Kirby Winfield
There’s this denominator problem where LPs are upside down on their deployment or their allocations to public market equity versus private because of the destruction in public market value and the relative lack of write downs in the privates. And so a lot of venture funds are going to be smaller. I think a lot of smaller and earlier stage funds are going to struggle to raise. So there are going to be less checks being written and I think it’s going to be really hard. People forget, but I don’t that yeah, the sort of stock market crash in the.com era was 2000, 2001, but the venture market just got decimated and really didn’t come back until 2005. So it’s not like we say, oh, wow, 2022 was a rough year, but we’re back. That ain’t how it goes. So?
Brett
Yeah.
Kirby Winfield
I don’t know. I’m not overly optimistic. I think it’s not going away. Obviously it’s not going away. Big funds will continue to raise lots of money, but I think the middle is going to get really squeezed. So I think there’ll be a lot of seed funds that turn into precede funds and a lot of a funds that turn into seed funds and a lot of preced funds just go away.
Brett
Now, we’ve talked a lot about stories, so let’s end with a little bit more about your story and what lies ahead. So what’s next for you? What’s the next chapter going to look like for both you Kirby, and for Ascend VC?
Kirby Winfield
Look, the next chapter is we’ve got a lot of dry powder and fund too, and it’s probably a historically good time to be ready to deploy that at the early stage. At the same time, we’re in sort of our fourth year as a fund and have started to establish ourselves a little bit, seeing great deal flow, have amazing founders to work with, and the market’s coming to us a little bit. And it doesn’t hurt that I do have the experience helping the folks at the Allen Institute for AI. It doesn’t hurt that we’ve been aggressively investing in AI and have more than 20 companies in the portfolio that are AI companies. So this is not a new thing for us. But certainly as the market is more and more interested in that technology and in that category, we start to be one of the more reliable partners for founders at the precede in that space.
Kirby Winfield
So I think probably the thing I’m most. Excited about is just really getting the chance to participate in some amazing companies in the AI ML space in the next two years. That’s probably what I’m most excited about.
Brett
Yeah. Amazing. Well, Kirby, let’s wrap there. I’d love to keep you on and keep asking you questions, but I know we’re up on time here. So before we wrap up, if people want to follow on with your journey, where’s the best place for them to go?
Kirby Winfield
Twitter, hands down. Twitter is my main outlet. It’s just at Kirby Winfield and you’re going to get probably 50% startup stuff, like 30% hip hop and DJ stuff and like 20% steely Dam. So if you’re ready for that ride, come join me.
Brett
Awesome. Kirby, thank you so much for taking the time to share your story and share your heights. This has been a lot of fun and hope to have you back on in the future.
Kirby Winfield
Thanks, Brett. Really appreciate it.
Brett
All right, keep in touch.
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