Ignite VC: Charlie O’Donnell on Founder Unfriendly and the Real Game of Startup Fundraising | Ep277

**Charlie O'Donnell** (0:00)
When you're projecting something that you believe you can promise versus what the potential is. So I always used to flip the conversation and I would go back to the founder and be like, I see you're raising a million dollars. Would you really not know what you would do with $2 million?
Those founders come back and she would say, of course I know what I would do $2 million. I would double down on product here. I'd hire twice as many salespeople. I'd open up in three cities instead of one. What do you think that would do to your revenue? Oh, that would really open revenue up. Like we would easily get to twice the revenue half the time or whatever.

**Brian Bell** (0:31)
Cool.

**Charlie O'Donnell** (0:31)
That pitch is way better than what you just gave me. Why didn't you pitch that? Well, I can't promise that.

**Brian Bell** (0:38)
Right.

**Charlie O'Donnell** (0:38)
Nobody can promise anything. I can't promise that I'm not going to walk out of my apartment and a piano is going to fall from the sky. Like I can't promise that. But this is not a promise conversation. This is a potential conversation because you're sitting across the table from a VC who knows that only one or two of the 30 deals they do in this fund are going to return the fund. They don't know which ones, but they need to make sure that they all have that potential.

**Brian Bell** (1:25)
Hey, everyone. Welcome back to the Ignite podcast. Today, we have Charlie O'Donnell on the mic. He spent 20 years inside rooms where funding decisions actually get made. First analyst at Union Square Ventures, then helping First Round open its New York office, where he sourced GroupMe, SinglePlatform, Moat, Backupify, and many others. In 2012, he founded Brooklyn Bridge Ventures, the first VC fund based in Brooklyn, and wrote first checks into over 100 companies, including Hungry Root, Pedal, Bridget, GoTenna, and The Wing, and others, building a reputation as the most accessible early-stage investor in New York. He made his final investment early 2023, walked away from the fund model, and has spent years since coaching emerging VCs. I've been looking for that conversation and running the next NYC community.
This spring, he just published Founder Unfriendly, What Investors Won't Tell You About Getting Funded, which hit number one in the new release in the VC category, and carries a cover blurb from Brad Feld, very cool. Thanks for coming on, Charlie.

**Charlie O'Donnell** (2:22)
Thanks for having me. I appreciate it.

**Brian Bell** (2:23)
Yeah, so I'd love to get your origin story. It's so fun to kind of hear VC stories because they're so different. But like, you know, what is your background?

**Charlie O'Donnell** (2:31)
So actually, my first job in venture capital was on the institutional limited partner side. So if you're out there pitching VCs and it's frustrating, keep in mind that they also have to pitch to raise their fund. They don't necessarily have to do it as often as you do, but we were the big pool of money behind a lot of the top tier names that you've heard of. GM had been investing in venture as an asset class since the 70s. So Union Square Ventures, when they raised their first fund, came to pitch to me back in 2004 So that was my entree into venture is funding funds and then eventually joining a fund.

**Brian Bell** (3:13)
That's amazing. How did that, I mean, was that just right off the college campus? Like, how do you land a job like that? That's pretty amazing.

**Charlie O'Donnell** (3:20)
It was kind of funny. It was actually a high school internship. So my high school, which is pretty smart, actually, after we had applied to our colleges, they basically kicked us out because, you know, you've applied to your schools. You're just kind of hanging around campus, like not really paying attention, sort of the senioritis thing. And so they're like, okay, we got to get you guys out of here because all you have to do is pass. And so you're just kind of mailing it in. So you had a choice of either doing a community service project or working on an internship. I chose internship, wound up working at the General Motors Pension Fund. And I actually all throughout college, because I went to school locally here in New York at Fordham, I bounced around a bunch of different asset classes. And the asset class that just happened to have an opening when I graduated was the Venture Capital and Private Equity Group. You might think, what luck, that's super glamorous. Keep in mind the timing. In 2001, I saw 10 negative quarters of performance before I ever saw a positive one. I mean, this was just the period of shutting down.com busts. And depending on when you had raised your last round, you either had like two years of money left or two months of money left, but you definitely weren't a viable business. So the VCs would sort of come in and every quarter they'd be like, okay, we did a triage and we think like a third of this portfolio is going to make it and return your money and a third is kind of on the fence and a third is just garbage. And then the next time you met them, we're like, okay, well, actually, it's a third, a third, a third. And after three or four rounds of that, they're like, I don't think our 99 Vintage Fund is going to return capital. Let's look towards the future. And so it was a really tough space at the time.