If you’re in tech, you probably know the name Hunter Walk – and not for one reason alone. Whether it’s his 140 characters or being one of “the best, coolest, smartest, weirdest” Snapchat accounts, Hunter has reached a certain level of celebrity for his poignancy on the web. But that’s just what he does for fun.
Today, Hunter is the co-founder of a three-year-old seed stage venture fund named Homebrew where he and his partner, Satya Patel, are growing some of the most remarkable tech and customer-focused brands, like theSkimm, ManagedByQ, Primary.com, and more. But Hunter has had an unlikely path to venture. His first gig right out of college wasn’t at a Silicon Valley stronghold, like many on the Sand Hill circuit. He was a Research Assistant for Late Night with Conan O’Brien when the talk show host was getting his start on NBC. Since then, Hunter has been committed to the reinvention of entertainment, building paradigm-shifting technology platforms.
“One of the most wonderful things about technology is lowering the bar for creation, allowing more people to be creative.” Hunter told me. “At the same time, technology platforms have an obligation to help creators get paid because this allows folks to double down on their craft, and not have to be a barista to fund their work.”
Vacillating between “traditional business” and doing more “creative work”, the guardrails throughout his career. “I was trying to figure out if I was left-brained or right-brained,” Hunter said, “moving back and forth between ‘I want to work on TV shows and be a writer’ to ‘I love spreadsheets and I’ve got to learn how to use this HP calculator.’ Soon I realized I wasn’t honoring who I was, which was a little bit of both – my opposites complemented one another.”
After management consulting, business school, and a stint growing some of Mattel’s video game properties, he was a founding team member of Linden Lab, the creator of the legendary “Second Life“. There, Hunter was “director of everything non-engineering” where he gave the platform its namesake and helped launch the first version of the virtual world.
Then, as director of product management at YouTube (post-Google acquisition), Hunter helped cultivate the internet juggernaut into what it is today. “I still get chills when I see someone on YouTube at the airport,” he said, thinking back to the days when the team grew the platform by 40x, from 2007 to 2011.
Hunter’s winding path in product and high growth companies led him to become what he felt was lacking in tech – the highly engaged seed stage investor a first-time founder desperately needs from the beginning.
Why? Much like the hustle of an artist, entrepreneurs follow the same unknown road of creation, and they too need the determination and support to double down on their craft. So in his SoMa office, Hunter shared with me his philosophy at Homebrew, and what he would’ve wanted to know at crucial periods of his career.
According to Hunter, one of the most impactful things you can do for your company’s growth is to develop a mature mindset from the beginning. It’s not about years under your belt. It’s about the questions you ask and how you confront your own limitations, willingly. At the seed stage, maturity is about being brave enough to ask for help. And when you have that type of focus, you’ll acquire a psychological edge that puts you ahead of the pack.
Asking the right questions
There are many ways a company can start out – in a dorm room, as a side gig, or at business school. But before a company gains real traction, Hunter believes a business begins by asking the right questions – why do two co-founders make a great team? Why is this team the team to solve this problem? Why is now the right opportunity, or right time? This isn’t just advice Hunter preaches to new founders. Following the questions was what inspired Homebrew’s creation in the first place.
After building a strong friendship at Google, Hunter and Satya knew they wanted to start a business together someday. They had that rare workplace spark which translates to creative and strategic chemistry.
When Hunter was thinking of leaving YouTube – and Satya, Twitter – the duo had honest conversations on the possibility of how they’d work together. But, they didn’t immediately think, let’s go raise a venture fund. Instead, they began with questions.
“We started off by asking, ‘What do we know about ourselves since the time we worked together before? What could we imagine doing? What’s going on in the world that interests us? Why are we the right partners?’” Hunter told me.
“When founders have an empathetic understanding of a market and they are connected to the problems they are solving, it’s a more ‘mature’ approach to a starting a startup,” he continued. “People tend to forget that your company is your first product, and you have to be intentional about building your company before it’s ready to really grow and scale.”
An entrepreneur may grow products too hastily, before getting the company part settled. For startups, time is a luxury, and often when you’re desperate to keep the lights on, pushing product, building features, and acquiring new users feels like the number one priority. However, knowing why your company exists is an absolute in order to build a strong foundation and move in the right direction.
It’s called “seed stage” for a reason. Hunter says “the seed” isn’t just a check; it’s also a way to get a second opinion and much needed coaching from your investors. They can help to steer your company in the right direction before it’s gone too off course.
“The biggest difference between some investors and Homebrew is this need to imagine myself working at a company in order to want to make an investment there. We’re not like that at all. You don’t need to want to work at a company to invest in one. Instead, we invest in a founder’s enthusiasm, and the company’s potential to change the market or the world,” said Hunter, “I’m enthusiastic about the business opportunity alongside it, and I’m fanatical about the founder’s reason for wanting to build that business.”
Hunter is clearly passionate when talking about his portfolio – his hand gestures get more energetic as he talks about Homebrew’s M.O
“I bet we ask more about ‘the why’ than most early stage investors do,” said Hunter. “But that was a choice Satya and I made when we started. In honoring that, we knew we’d be able to invest more of ourselves in our founders, and write bigger checks to fewer companies.”
This is because Homebrew wants to be a “partner of conviction” with every company they invest in. And there’s a big difference between committing money and making a commitment to a founder’s growth.
A partner of conviction
At seed stage, Hunter explains that it’s not just the amount you raise during seed stage, but who you’re taking money from. When you clearly understand the terms of the relationship between founder and investor (rather than just the percent or the dollar amount on the check), there’s less room for disappointment and more room for trust.
“Being a partner of conviction means being the person from the investment standpoint with the most skin in the game,” Hunter said. “It’s being the person who the founder will reach out to not when things are going well, but when things aren’t. It’s not just about being available and involved during the most exciting growth challenges but during the plateaus and the speed bumps.”
But Hunter’s clear – not every founder wants a partner of conviction, and that’s completely fine. Some want multiple, smaller checks and the theoretical freedom to build and run the company as they please without an investor’s input.
“We go into every conversation or meeting with a potential Homebrew company to ultimately see if they not only have an interesting business opportunity, but if they are ready, willing, and interested in having a lead investor. In this case, a lead investor would be one that financially invests the most, and also makes a commitment to supporting the company’s development and the decisions it makes,” said Hunter.
Sure, the primary reason for fundraising is to eventually receive a check. However, those first few conversations with investors are effectively to see if the founder and investors are compatible and if they have a shared set of values and understanding on what both parties are trying to achieve.
“While some seed-stage funds claim to be ‘founder friendly,’ their level of attention to their portfolio doesn’t make them the mentors founders originally thought them to be,” Hunter explained. “Partners play hot-and-cold on investments, ready to scrub a logo from their website if it’s not doing well. That sounds harsh, of course, but anyone on the investor side that doesn’t offer high-touch attention to their founders would tell you that’s just the business of venture. They’re offering capital, not mentorship.”
“We are ultimately truth-tellers behind closed doors,” said Hunter. “So in this case, being ‘founder friendly’ means high levels of trust and communication. When we see a repeated pattern that’s a problem, we’ve earned the right and closeness with a founder to be upfront with them and say, ‘hey, you’re never going to scale as CEO if you keep doing this.’”
“We’re accountable for helping our founders build the best version of what they have inside their heads. We’re also an ear to the market for understanding what they need to accomplish in order to get that next funding round.”
As many entrepreneurs know, turning an idea into reality doesn’t happen easily. In order to earn that Series A, a typical first-time founder will inevitably undergo tremendous amounts of criticism – constructive or otherwise. Weathering these tough periods (and rising above them) require high levels of resilience and maturity.
While the internet is riddled with advice to startups and founders, the cold, honest truth isn’t often favored with upvotes. The only way to reach the necessary level of mental and emotional acuity is to grapple with the challenges day-in-and-day-out. Planting roots in your company can feel like a slog at times, and the learning curve is steep.
However, that is the psychological edge Homebrew brings to its portfolio – persistence and determination for the long haul. Hunter sees the seed stage as a perfect bootcamp for his founders, with many obstacle courses ahead of them, and an opportunity to condition a company for the next challenge. Setting up a board, even for companies of one or two, is an exercise in maturity most founders don’t expect at seed. But it’s one of the most important ways they can set up their company to excel.
The importance of having a board
As you’ve might’ve guessed by now, founders are Hunter’s top priorities. Homebrew’s model is set up so that Hunter and Satya spend at least 50% of their time with their current portfolio, getting their hands dirty in solving problems.
“We’ve got standing one-on-ones with all our founders, which is meant to be their time with us. We offer much more frequent communication as needed in between those weekly or bi-weeklies, depending upon what the founder wants,” explained Hunter.
“We also strongly believe in boards being created, even at seed stage. Many entrepreneurs still think of boards as control, rather than advocacy, and that’s where a lot of them are wrong,” he continued. “At seed stage, boards are not for governance. They aren’t fiduciary. They’re frankly nothing more, in many cases, than a slightly longer one-on-one.”
This might seem like a moot point – if boards are just extended one-on-ones, why do board meetings at all? But Homebrew sees direct value in setting up a structure for high-level thinking. “Boards help founders to think about the forest, instead of the trees,” Hunter said.
“If we believe your first product is your company, let’s make sure we’re starting to create the structure around that, and think at a company level, not just a sprint level,” he continued.
For Homebrew, it’s a framework that helps their companies rehearse for the next stage. Building a great product is extremely difficult, but becoming a leader requires a whole other set of skills. And there’s not much time to wait. If founders wait too long to develop these skills, they’ll be left behind before securing their next round of funding.
The Homebrew method has proven to be effective. Hunter tells us that 80%+ of Homebrew’s first fund investments have moved forward to the next round of fundraising.
“I want a founder to start building a cadence of leadership, building confidence in themselves as first-time founders,” he said. “If you’re a first-time founder, you need to work up toward running a board meeting. You shouldn’t go in cold after raising $15 million. After all, you go to the batting cages before you face major league pitching.”
A league of their own
To Hunter, practicing maturity is really about coaching a young leader into new found confidence. Gaining a psychological edge at an early stage is advice I not only trust, but I’ve seen in practice.
At a dinner party in SoMa, my boyfriend ran into a former high school buddy. This old friend said he just completed Y Combinator’s Summer 2015 class, postponed Harvard Business School, and secured a round of seed to get his “Slack for healthcare messaging company” off the ground. I loved hearing about the company’s momentum, but what stuck with me most was when he said, “All we’re focused on right now is doing what’s necessary to get us to Series A.”
This is Hunter’s philosophy in practice. When your first product is your company, building up your company’s musculature is priority number one, and a partner of conviction can help you get where you need to grow.
“At the end of the day, our higher priority is to create a strong community amongst our founders.”
“The first step begins with helping them become the best versions of themselves. As partners of conviction, this is the most consistent and dependable way to build a long lasting community versus having to force rank our portfolio by ownership,” said Hunter. We’ve learned that by coaching our founders into maturity, they’ll be able to pay it forward, problem solve, and give seasoned advice to one another down the road.”
This has been Part One of a two-part series on Hunter Walk and his perspective on company growth. Be sure to subscribe to The Signal below to get Part Two sent straight to your inbox.