20VC: From Seed To Series A: The Due Diligence, The Valuations, The Investment Decision Making Process with Steve Schlafman @ RRE Ventures

Harry Stebbings (0:00)

Welcome back to another episode of The Twenty Minute VC with your host, Harry Stebbings, and you can find me, as I'm sure you will know by now, on Snapchat at hstebbingswith2bz for all things behind the scenes at 20 Minute VC. But now for today's show, I'm thrilled to welcome a good friend of mine and fantastic VC, Steve Schlafman, Schlaf, in other words, early stage investor at RRE Ventures in New York, where he specializes in marketplaces, mobile services, and hardware. And at RRE, Steve has led investments in the likes of The Skim, Hightower, TinyBop, Breather, and Managed by Q. And prior to joining RRE, Steve was a principal with our friends at Lerer Hippo Ventures in New York. And if you haven't heard our interview with Eric Hippo, then that really is a must and can be found on the site at the20minutevc.com.

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But now it's time to welcome the main man, Steve Schlafman, at RRE Ventures.

Steve Schlafman (1:45)

You have now arrived at your destination.

Harry Stebbings (1:48)

Ready?

Steve Schlafman (1:49)

Yep, let's do it.

Harry Stebbings (1:50)

Steve, so awesome to have you on The Twenty Minute VC, and so enjoyed your AMA on Product Time quite a while ago now, but thank you so much for joining us today.

Steve Schlafman (1:58)

Thanks Harry, really great to reconnect.

Harry Stebbings (2:01)

Now, I'd love to head into the show with a quick profile of you, and how you came to be where you are today with RRE, and the kind of three to four minute synopsis on how you got into VC.

Steve Schlafman (2:11)

Sure, so I always like to say I'm a little bit of an accidental VC. I never really intended to get into this line of business, and what ultimately happened is it was just a stroke of luck how I started evaluating companies. But Harry, the reality is is I've been obsessed with technology and really video games since I was a very little kid. I got my first Nintendo when I was four years old, and I owned every console up through high school. That really started my love for gadgets. And ultimately I was in college and I started my career at Microsoft, specifically in their venture integration team. So this was the team that integrated acquisition, their acquisitions, monitored all the strategic investments from the.com era. And that was really my first taste of the VC business. About two years in, I had a really unique opportunity to go work for a startup here in New York called Massive, which was an in-game ad network where I worked for the COO running a team for her specifically around network projections and ad operations. So we were the team that effectively straddled business development and sales. Shortly into my stint there, I had another unique opportunity that fell on my lap to go work for the Kraft family that own and operate the New England Patriots. And that was just a really unique experience in that they have businesses, certainly in sports entertainment, but also in paper and packaging and real estate development and private equity. And so I was able to help them evaluate businesses across all of those areas of focus.

I remember at the time when I was interviewing with them, I offered to evaluate a few investment opportunities they were looking at. And that was really how I first sank my teeth into the venture business, although they didn't have a formal VC fund. And about three and a half years into my time there, I had a chance to move back to New York, which was calling me and I saw the rise of technology. Things were just getting started here.