William Leonard
Hey everyone. Welcome back to the Atlanta Startup Podcast. My name is William Leonard, your host for today. I’m excited to be sitting down with Triet Nguyen, who is a Senior Associate at Render Capital. Triet, welcome to the podcast.
Triet Nguyen
Hey, well, thanks for having me. And yeah, looking forward to this conversation.
William Leonard
Likewise, it’s always a pleasure to sit down with another regionally focused investor who is taking advantage of being in one of the best regions in the country in terms of growth, capital, and diversity. So, maybe Triet for those who aren’t familiar with Render, you can kick us off with an overview of the firm and really what excites you all.
Triet Nguyen
Yeah, so a little bit about Render Capital, we’re an emerging fund out of Louisville, Kentucky. We’ve been around since 2019. And how we got started was with a $15 million fund. And that one, it was a community fund. So instead of being very return driven, we were more economic driven, where we deploy capital through certain programs, to invest in companies that are based in Louisville, Kentucky, or they’re willing to relocate. One of the programs are the render competition where we host every year, we invest $100,000 into eight companies. Another program is we’ve won our match program, where companies that are in Louisville when they raise on WeFunder at certain tiers will match their campaign. So for the first 20k, we match 20k. When they get to 400k, we up our match to 600, and then our last program is called our First Dollar in Program, primary focus on investing in black and brown founders. Luckily, we deployed all the capital in that program. So we invested in a bunch of founders in the area. But luckily for us, and the founders in the region, we found partners to carry on deploying capital for black and brown founders. And then for that one, as I mentioned, economically driven, so our LP focused more on the number of jobs we created, the companies you invest in, and how does that generates income tax for the state, especially the city. And then it wasn’t until December of last year that we launched our more traditional VC fund of $50 million. This one, we’re able to be a little bit more flexible. So early stage PreSeed through Series A’s are a sweet spot, industry agnostic letting markets let us know what areas to avoid. What does that mean? So like, right now, we’re avoiding anything that’s highly regulated, as well as hardware just because of interest rates, you don’t know what’s gonna happen with political shifts right now for policies. But other than that pretty industry agnostic. And as you mentioned, we are geography-focused. So the Midwest and the South are where we like to invest. And how we really define that is anywhere in the US outside of New York, Boston, and the Bay (area).
William Leonard
Nice! And you and I, Triet were talking about this. A few weeks ago and earlier today, just about, like winning competitive deals and differentiation, I think with the emergence of so many VC firms that have come to the market now capital has become commoditized. And like we were saying earlier, to succeed and win competitive deals, founders want that differentiating factor. And we’ve seen firms like Valor and Render, and others do this through platforms, right? We have Valor, have Startup Runway, we’ve got the Podcast, we’ve got VC. The Render has WeFunder Match, First Dollar in Competition. Tell us more about some of the why behind these programs. And maybe you can talk just about the importance of creating a platform as a VC firm and how it helps you get into those deals and when those deals.
Triet Nguyen
Yeah, I think you touched on a very important point, right? Like having platforms and for us running these programs give us access to founders very early. A lot of the companies that are selected to, you know, get funding from these platforms, they’re in the angel very early PreSeed stage. So it gives us access to trying to provide capital and help them even earlier. That way when they do get to the point where they have the VC metrics, we’re top of mind, and they give us a call when they’re ready for VC capital. And that’s where we invest out of our Fund 2. An example of that is one of our portfolio companies, Xena Intelligence, they won the competition back in, I want to say 2021. And amazing growth, we moved them from Boston to Kentucky and saved a bunch of money on the cost of living. And he ended up loving Kentucky and staying here because he loves fried chicken. And he said that was one of the reasons why he stayed along with the cause of living. But whenever they got ready to go do their Seed Round, they reached out to us. We gave them 100k, very early on when it was just barely an MVP. Outside of that, I think we tried to be differentiated. But at this point, there are so many reasons why founders pick VCs, first, our team is two partners, we’re all either former operators or founders. So that’s pretty attractive to founders. Mainly, that we’ve been in their shoes, we understand what they’re going to some point. And then the other aspect of it. And, I’ll be honest here, we’re a generalist fund, and there’s no way for us to help everyone and anyone that we want to invest in. So we try to keep that in mind and during our conversation, as we talk with founders, we always ask them, “Hey, why us? Why are you picking Render Capital?” Tell us what is your ideal investor profile looks like for this round. And then that gives us an idea of, can we truly help this company? Can we be a value add outside of capital, and some companies, if they just want the capital, that’s fine, that’s great. I don’t think it works for us. Just because we’re an emerging fund, there’s three of us, that means that the people that you’re talking to you, we’re not going to pass you off to another person or anything like that. So we want to have that relationship. And that’s one of the reasons why I left my previous fund was, we had about 40 people at the company, it was very siloed. So where I was only doing just deal flow, I would have to hand off my companies to another department. And that’s not really why I got into VC, right? I got into it because a relationship is relationship-based so I want to be close with the founders that I bring in because you get this, when we’re sourcing in the early days, you’re essentially selling yourself, but the fun. And when you sell your reputation, your credibility, and all this stuff, you want to make sure you have that tie down the road to deliver or sometimes you might just say I’m sorry, I can’t deliver on this. So yeah, and I think another thing that gives us an edge is that we have render capital, but we also have render innovation, which is our business consulting side. So they work with government, organizations, state, local, state, local, all over as well as corporate companies. And that kind of gives us a good tie of a network. If you want to call it enterprise potential customers. It goes, it gets us on the investment side, like oh, what are corporate companies running into? What are the biggest issues that governments are facing? For intros? And then of course, we have, I like to think we have a great investor network, you know, such as Valerie see that we can share a deal flow with.
William Leonard
Yeah, I think it’s so important, man, like, you hit on a lot of points there. But like, going back to the platform side of the conversation, right, I think that will become table stakes here, as we’ve seen, pretty much anyone raised capital and 2020, 2021 and now there’s a constriction of capital from LPs, and cutting back allocations. And, it’s interesting to see and I think as a fun, you need to be able to demonstrate to founders that you can support them outside of capital. So next round financings, helping them think about strategic partnerships. brand building is one that I’ve seen a lot of founders talking about, recently on LinkedIn, and social media just about building a brand and representing their LPs. They’re investors with the brand that they bring to the table and attract and retain the best talent. And so it’s so fascinating. tret and you also talked about sort of breaking into the industry a bit I know you have a unique background. And, you know, I think our backgrounds are pretty similar in terms of just coming from non-traditional previous roles and understanding what it takes to break into Vc. I get a lot of people reaching out to me And I think one misconception is that people don’t understand how much of a sales job that being a VC is like, honestly, it’s it’s just sales, right? You’re you’re selling your firm, as a VC, you’re selling your strategy to LPs, you’re selling your value add to founders, you’re selling your credibility to co-investors to come in on a deal with you, or shall share deal flow with you as well. So it’s heavily sales-oriented. But maybe you can talk about your path and how you broke into the industry.
Triet Nguyen
Yeah, I, it’s funny, you touch on how VC is so much of a sales position because I used to be in a sales program in college. And I was just a terrible sales student. And my professors said, Hey, maybe sales isn’t an industry for you, because I don’t think you’ll make it. Then here we are. More than happy to share a little bit of background. So I came out of college, wanting to do events like I just wanted to throw a Music Festival, new events, and it up and honestly is very fortunate that I got an internship at the Dallas Entrepreneurs Center, where they helped founders go from idea to the first fundraiser. And that was really where I kind of fell in love with startups, I got an opportunity to transfer over to Capital Factory, which is an accelerator fund down in Texas, the most active investor in Texas. And that was really where I fell in love with VC. Luckily, for me, though, at the time, they had just launched a location in Dallas, just because their headquarters was in Austin. And you know, one of the things that I always heard from mentors, and you hear on social everywhere is that if you’re just coming out of college, go and you land a job somewhere, try to network with other people outside your department take on projects, especially if you’re at a startup that is not in your department. So that’s what I did volunteer to, you know, help out the marketing team, the partnership team. And I was interested in what venture capital was, I didn’t know what it was. And I approached the venture associate at the time. And I was like, Hey, I have about 10% on my plate that I will have to allocate to you. Because I’m interested in learning about this stuff, whatever you want me to do, just let me know, I can take notes, do the boring stuff, whatever it is. She said, that’s amazing. You do events, Dallas is a big city, and I can’t go to multiple events at the same time. So what we did was, I guess, sort of like a scalp program. Anytime I meet a founder that I thought was interesting. I would bring them to her. And we would meet for lunch or coffee every Friday kind of going over. The companies I thought were interesting. And she would kind of like talk me through it. And it’s like, Oh, why did you think this was interesting? If I didn’t have a company, then we’d talk about markets. And then during that course of time, the company that brought you ended up going to the accelerator fun. And she was like, Hey, you have a knack for this if you want to break into Vc. Let’s talk about that and try to figure it out. So the first step was to network with all the mentors at the accelerator fun, I took office hours, with a lot of them asking for advice. Most of them mentioned you needed to go get an MBA, go work at consulting, or investment banking, I couldn’t do any of that. Or go get operation experience. I was like, okay, I can do that. And all that means is I started my own company during COVID. It was a CPG company, I started with my roommate. Essentially, we did on-demand keyboard delivery in North Texas, taking everything I learned from the tech industry, and applying it to a catering business. And that’s how we beat our competitors, which are just automated to provide convenience instead of ordering two days in advance. It gives us an hour and 15 minutes, and we can bring it aboard to your door. And I think you kind of touched on this earlier as like we now nowadays we have a lot of people reaching out to us about like, oh, how do you break into Vc. And from LinkedIn, it seems like it just happened overnight. And even sometimes when we speak on panels or like podcasts, it sounds like it just happened overnight, but it didn’t it started my journey starting to like I want to break into Vc and when I did break into Vc, it took me about three years. So going through all that process having that apprenticeship from her along with other VCs industry that was 123 years in front of me I can have more actionable plans to break into VC. Swallow starting a company just get the founder experience learning what that’s like. Started angel investing you or, I guess, total. So far I’ve made about four angel investments learned a lot through that process, been through two different venture Scout programs, and volunteered my weekends and holidays working for startups, like nothing like getting paid just volunteering, like, Hey, do you need me to build you a better inventory database? Sure, I’ll take that. But you don’t have to pay me Give me equity. Let me be an advisor. And kind of going through reading tons of different books on the sea, taking a bunch of courses, all that good stuff. And then the opportunity to just come and I wouldn’t say I got, I didn’t break into VC until like this year at render capital, just because last year, it was just deal flow, which is mainly just sell. So it wasn’t too much VC.
William Leonard
Yeah, I think one of the underlying themes that you hit on in that anecdote is networking, right? And that’s what I tell people who always reach out, it’s like, network, meet with analysts, principals, associates, partners, if you can get access to them, and understand their thesis, what they’re looking at in the market right now. And send deal flow with no expectation in return, just like, sending them deals, but make sure that it’s aligned to their thesis, because I tell people all the time, it’s no, no worse feeling that someone’s sending you a deal. That’s, you know, 1000 miles from your thesis, and so off. And so I tell people that and like, stay up to date on the industry. So as you’re going through interviews, and conversing with people in the industry, you can talk and sort of speak the language. So like, I tell, I was telling somebody the other day, like, read three articles a day, right? Like, go on TechCrunch or Wall Street Journal, read something relative to the macro economy, read something relative to financing or a deal, or an M&A in the particular verticals that maybe you’re fascinated in, and then read an article about a particular company or an industry, so that you can sort of build some expertise and deeper knowledge around that. And I think as you said, you do those things, you send people deal flow, you immerse yourself in the industry, you do things with no expectation in return, opportunities will just start to gravitate towards you. And I think you kind of create your luck by doing that and putting that work in on the front end. So that’s good advice. And one thing that you talked about tread was networking and community. One thing that Rinder has done well is get involved with the community, especially the founder, community, I want you I want you to talk about the founder toolkit that you all have built and sort of open-sourced a bit and tell us more about what that is and how it’s supporting founders at the earlier stage.
Triet Nguyen
Yeah, it’s interesting, that you bring that up, I would say, that helped me stand out to render capital when I was going through the interviewing process. Because when I was trying to break in, I was essentially obsessed with VC. And I essentially bookmarked every resource about the startup fundraising investor database, I could find on almost any platform. And then I was like, You know what, for some reason, I’m not getting I can’t break into Vc. So let me focus on showing my value to serve a VC’s customers, which are founders. So I built a founder toolkit. All of of it was just broken into two different boxes, fundraising resources, where I linked and of course, credited all the information from what a cap table needs to look like, what is a due diligence checklist should like in a data room looks like for a founder and the first, you know, when an investor is like, Hey, I’m your data, what’s in it? And then I think we made like, curated investor databases, where it’s broken out right now we have about 15, Curie investor databases in an investor database. So depending on the industry, where you’re at, stage you’re at, there’s a list of funds that is a potential fit for you. And whenever I was interviewing venture capital, that was something they asked like, what value we’re gonna bring to the fund that we can’t do ourselves. And I was like, Okay, well, there’s only two of you guys. You guys don’t have a portfolio service platform. This is the toolkit I built. This not only generates deal flow for us but also helps founders as well. So that’s it. Got a tie back to our differentiator like now, when we, you know, elaborated built more to it. The founder toolkit, talks about our thesis, it gives a ton of resources on fundraising as well as investor databases. And for us that’s trying to show that look, all ships rise with the tide. So even though we aren’t investing in you, we want to be able to point you in the right direction, so that you’re closer to a yes, on your next call. And doing so I think helps our social capital. But end of the day, we were former founders and operators, and we know what was like to hear no, with, you’re just too early. It was like, what does that mean? It’s like, Oh, you’re too early checkout funds somewhere else? Like, do you know them? What are their names? Because most funds don’t tell you what exactly they’re looking for, or like their thesis, very broad thesis. So now that those were very difficult, we made that a big hit with founders. That’s something that we always give to founders. And our partners also make it a very, I guess, key point, and like, they ingrained to me that yes, sometimes it’s difficult to tell a founder, why you’re saying no, but we need to do that. Even if it’s just short bullets, that differentiates us, and that makes us very respected by founders. Instead of I know a lot of fun, trying to be founder-friendly, we try to be found or respected.
William Leonard
Yeah, I agree with that point, right, because, and this is something that I learned over my time of being in the industry, I used to be afraid to tell people why we’re passing. And, you know, and I think there is a respectful way that you do have to go about passing. But as you mature throughout the industry realize that founders want the real, like, they want to know why you’re passing and what they can do to improve their chances with the next conversation with the next investor. And I found that founders respect that over a general, oh, this is too early for us right now. Come back in six months, or, you know, we’re passing for some very generalized broad reason, I think articulating truly and concisely on why you’re passing. And what makes this opportunity out of scope for you all, really does create rapport and relationship with the founder, because they’re going to respect that they’re going to respect somebody who’s not guessing them and telling them the truth. So I can resonate with that point as well.
Triet Nguyen
Yeah, it’s, it wasn’t until, you know, the more I did it, the more response I got, where founders were like, Hey, I understand. And I just want to say, really appreciate you for being transparent with me, you’d be surprised how many funds just don’t reply in general, or just say, Hey, you’re too early. And honestly, sometimes I just tell them straight up where you are too early for us to take this risk. And that, that they understand that, like, they understand like, okay, so it’s not just like, You’re too early, because there’s a magic number we have to hit is from a risk profile. They understood that, why, and why what we mean when they say when we’re saying they’re too early, so yeah,
William Leonard
yeah. And some of the best relationships are built like that, where you’re bullish on the founder, maybe bullish on the industry. But the company or product maturity just isn’t aligned with your core thesis, and you build a relationship over 369 12 months, and you come back, you check in over time, and who knows that deal might get done. But I think, like you said, building that relationship, being transparent establishing that vulnerability is really important. And you know, you all are thinking about the market right now, right? You’re focused on preceding through Series A, you’re intentional by letting the market dictate your strategy. How are you all thinking about, you know, pre-seed and seed and series A deals right now in the market, given where we are from a macroeconomic perspective?
Triet Nguyen
Yeah, I think it’s going to depend on a lot of different variables. I try not to be too broad to answer this question. So we’re, we’re thinking about right now is that first Series A, yes will invest in Series A, but for our strategy as an emerging fund, that’s primary focus for follow-on investment. So I would say a company would have less than 1% for us to just be open to doing their series A unless it’s like crazy traction, very low valuation, and it’s just a crazy deal, which you’re not going to see it But when we talked about pre-seed and seed, you know what we’ve noticed that there’s quite a lot of other funds that are either shifting their focus or they’re trying, they’re raising their next fun. And they’re shifting later stage, at least here in the Midwest. And that’s what I’ve noticed is that they’re going later stage. There are a lot of reasons why that is. But that Prime’s the market for us to say, hey, everyone’s going to a later stage, and we know them already, at least we know, the person to send our companies to. So let’s stay here, let’s walk down the path that is not being walked down by a lot of folks. And the day, it’s like, kind of going back to the mission statement that we have on our website, it’s like, we envision a world where there’s more opportunities than their obstacles, right? And part of that is, you just got to stay investing in the early stage. And as far as how markets are going, I think, in the Midwest, and the South, I mean, you’ll probably see is that valuation has always been lower than then on the coasts, founders have been more realistic about their traction to their valuation, multiple, all that good stuff. So we don’t see too much of an influx, yes, it is lower, I guess previous years, but it’s not that much lower. Right. And with this thesis, where, if you ask, we had this conversation six, eight months ago, or average check size, then was about 250 to 500,000, on the initial investment, but now we completely changed it where and you know, shout out to our LP for helping us come to this conclusion was that we want to take larger swings, we realize our deal flow or network is providing such great opportunities. And now we’re being more active on the deals of okay. We don’t want to even want to write tumeric, a check for like 250 is like, if we want to invest in a company, we want to come at it with the conviction of writing half a million dollar check and ask for board observer seats, or at least a board seat, at least just for this next round. So that we can be a little bit more involved, to make sure that we have that conviction of the companies that we’re selecting in, does that mean that we’re doing less deal flow? Yes, but we’re writing bigger checks. And I think I forgot what fun it was. But there’s a VC fund out of Atlanta, they release it, that pretty much state of VC in the southeast, where Meramec. Yeah, let’s deal with being done. But they are cheque size. And I think that starting to ripple effects across the Midwest and the South, just because we don’t have the amount of capital and funding from LPS like the coasts. So to make the return met, the profile worth it is to take larger swings and be more active, but fewer swings.
William Leonard
Yep. That’s a really interesting assessment there. Right and shout out to Panoramic for putting out that State of the Startups report recently. And no, I think that’s what you mentioned, right, smaller checks, more deals or larger checks, fewer deals, I think that’s an inflection point, a few firms have come to recently just given where the market is today. And you have to have some sort of agility and and nimbleness in your thesis and strategy as the market begins to shape how capital is going to be allocated here, over the next you know, 612 18 months, who knows how long we’re going to be in this inflationary environment. So it’s really interesting but Trent, how can founders listening to the conversation today, get in touch with you or someone on the render capital team?
Triet Nguyen
Yeah, so if you want to, you know, send your pitch deck and all that good stuff, obviously render capital, we have a button where submit your deck you can kind of go through the quite the form there and it kind of lets you know, like, based on where you’re at, for both geography stage-wise, which fun is the best fit for you? Also, you can find me tret T ri E T, at render dot capital. That’s my email pretty quick to respond. Sometimes depending on the season, I will respond might not be with the answer you want, but I will respond.
William Leonard
I love it. I love it. Well, Trey, I think that’s a good place to wrap. I appreciate you joining me and thanks for joining me, man. Take care.
Triet Nguyen
Thanks for having you.
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