Walter Kortschak, Firestreak Ventures Founder on AI Investing

Grace Gong (0:02)

We're live. Hi, Walter. Welcome to Venture with Grace.

Walter Kortschak (0:06)

Nice to be here. Thanks for having me, Grace.

Grace Gong (0:09)

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Walter, I want to start with your career because you are such a legend in the industry. So you have worked for over 37 years at Summit Partners, and you helped co-started with Chris for SignalFire. And obviously, now you are investing on your own, which you have done a lot of amazing deals from Stripe, SpaceX, OpenEye, Anthropic, just to name a few. And you're on the Midas list for multiple years back in time. So I want to start with World War III core lessons that you've learned early on in your career, kind of shaping into who you are today.

Walter Kortschak (1:19)

Yeah, well, thanks again for having me. And yeah, so I think that, what I think I really learned kind of over the years is you really can't predict the future. And oftentimes, venture capitalists are asked to do so, but I think the best you can do is sort of follow what's changing. And then basically place bets so that eventually you're on the right side of history.

And a lot of this comes down to learning the unique aspects of sort of the founders that you're most interested in backing. And these are outlier founders with a novel insight in an area with positive market dynamics. And it's the market that sets the maximum outcome, but it's really the founder that needs sort of the raw intelligence to really iterate, if you will, and exploit basically the opportunity that is in front of he or she. So I guess what I would say is I've learned a lot about just being an empathetic listener, if you will, to founders and realize that that's probably the loneliest job in the world and really be there when they need you most. And, you know, if you really look at what the founders are up against, it's really daunting. You know, how do you zoom in on a customer issue in the morning and then zoom out to pitch a 10-year revision in the afternoon?

It's how difficult it is to feel pressure to hire faster and still keep quality high. So these are the types of things that I think because it's so lonely, you know, it's, you really need to be very honest with these founders and hear what's going right, what's going wrong. And that's the seat that basically I try to sit in. So, you know, I'm not the smartest person in the room, I'm just the one who's maybe been there before, and we'll pick up the phone when these founders need me.

Grace Gong (3:42)

I love that.

I want to start with like, when it comes to like, I feel like since like Summit Partners is like a gross equity firm compared to, you know, like now, like compared to like traditional venture investing, which is like very early stage. And maybe we could talk about like, what would you say is like the core differences from like, when you jump from like, you know, gross stage investing or to, you know, SignalFire, which is having like a completely different strategy from like, you know, data to like their play into like different emerging managers to like, kind of like reshaping the venture industry. What are something that you find is like similar when you're looking at these two kind of like stages compared to like, or like compared to like, you know, differences?

Walter Kortschak (4:30)

Well, certainly at the, at the, at the earliest stages where SignalFire plays, for example, and certainly where I'm playing now at Firestreak.

You know, again, I go back to sort of founder assessment. And, you know, really helping founders become the best versions of themselves. Do it in a, in a, in a quiet manner. And never taking credit for their success. And that's really what you have to live up to every day. I think with respect to, to sort of the summit strategy, more growth equity, if you will, you know, it's, it's really coming, coming to meetings with a very prepared mind. And frankly, an opinion. And being able to not get caught up sort of in the, you know, in necessarily whether a company has tremendous momentum at the time. But growth investing is really about anticipating where's the peak. Because the trouble you get into in growth investing is if you're investing in markets where fundamentally you're reaching sort of, you know, headroom limitations.