186 Ventures with Giuseppe Stuto | E282
Seeding the next generation of tech solutions.
On this episode of Fintech Impact, host Jason Pereira talks to Giuseppe Stuto, co-founder and managing partner of 186 Ventures. It is a venture capital firm founded by former high-growth tech executives themselves. They have been there, and they know how to advise people who are going through that same journey. Giuseppe explains that their criteria for investing in a company involve evaluating founder market fit, the competence and unique positioning of the founders, their understanding of the problem, and their passion and motivations for building the business.
Episode Highlights:
00:47: Giuseppe Stuto says that they are at an early stage precede and seed venture capital firm. So, they typically invest at the earliest stages. There may or may not be a company incorporated or maybe a business already with over $1,000,000 in annual revenue, but primarily invests in the US primarily in the Northeast.
01:43: Giuseppe shares how he and his best friend started angel investing.
02:09 Giuseppe and his friend wrote 32 Angel checks and then followed three years during that time of investing in the early-stage companies. Angel investors, we found that for various reasons, founders were really resonating with messaging and support.
04:05: Giuseppe talks about the importance of having the right partners early on now to be clear. Giuseppe is always candid that investors do little to nothing in the grand scheme of things in helping founders build the business.
07:25: As per Giuseppe for the most part, they make sure that they leave that initial meeting with two or three ways they can begin to provide value to that founder.
07:49: Giuseppe and his team like to be helpful to every founder, because unfortunately we do obviously spend more time with those that we invest in or try to invest in just the nature of the beast.
10:04: The investors focus on connecting companies with key team members and leveraging their extensive network of technical and industry experts to provide support and value to the companies they invest in.
10:40: Giuseppe highlights their strategic approach post-investment, which involves maintaining relationships with downstream capital network peers and regularly updating them on the latest investments made by their firm, including Integrated Products and other deals closed in Q2.
11:57: Giuseppe emphasizes their role in assisting founders by aligning their goals, providing insights, and offering support through various programs tailored for founders and operators.
13:45: Giuseppe expresses that they are on the fence about a certain point from a philosophical standpoint, but when it comes to investments, they do not compromise on being nearly 100% confident that the founders have a very unique reason for building the business.
14:49: Giuseppe mentions the importance of understanding how founders and managers think about unit economics. They highlight the potential consequences of not considering unit economics carefully, which can lead to building an unsustainable model over time, especially when faced with high cost of capital. They acknowledge that they may find themselves in such a position with some of their portfolio companies.
15:08: Giuseppe acknowledges that building an unsustainable model can be challenging to unwind, particularly in times of high cost of capital.
16:00: Giuseppe explains that they led one of Wingspan's seed rounds in December 2021. They highlight the increasing reliance on independent contractors by companies in the wake of the pandemic and the shift towards more people being open to freelancing.
21:29: It's crucial to have a deep understanding of the local market when making investment decisions or implementing business strategies.
24:19: In the context of early-stage startups, the definition of "early stage" typically refers to the initial stages of a company's development, usually up until the Series A funding round.
25:20: As an early-stage investor, Giuseppe mentioned that they don't see themselves moving beyond the early-stage investment phase. They anticipate focusing on Series A investments for the next 6 to 10 years. It seems that their investment strategy and organizational foundation are aligned with early-stage companies, and they may not have the intention or capability to transition into later-stage investments.
28:03: Giuseppe mentions that one of the biggest obstacles they faced was adapting to the remote work environment during the pandemic. Another challenge he mentioned was the difficulty of leading complex deals that involved prolonged interactions with founders over several weeks or even months.
3 Key Points:
Giuseppe shares how in early 2019, the brand was founded and then in fall of 2021, they started investing out of their first institutional vehicle.
Giuseppe talks about the 4 pillars that they consider when deciding upon investment.
Jason expresses the desire to discuss the investments made in the fintech sector and asks Giuseppe to provide details about the companies they have invested in and what attracted them to those companies.
Tweetable Quotes:
"Never before was there more of a time where founders should partner. With firms that actually have institutional know-how and being able to build companies themselves." - Giuseppe Stuto
"In mid 2021, later on the peak actually where many funds were coming to market, new ones particularly we decided to institutionalize our platform and raise our first fund vehicle, which is a $37 million fund today." - Giuseppe Stuto
"The experience of having been there and done, that's incredibly valuable, but there's also an underlying thesis to the investments." - Jason
"We start to build momentum for the CEO without them doing anything at all. That's another way that we differentiate because it also helps in some cases we connect with those investors before they even connect with the company just to gain other data." - Giuseppe Stuto
Resources Mentioned:
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