Ep. 321 How I Raised It with Kane Hsieh of Root.vc
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How I Raised It - The podcast where we interview startup founders who raised capital.
37 min
8 chapters
transcribed 18 days ago
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What is Root Ventures and how does it differ from other seed funds?
I think it's infinitely harder to be a founder than to be a VC, but there are analogies in how the rules work. Founders often complain that you know, talking to a VC is kind of opaque. How do you get an interaction? How do you like why is it so hard? It's kind of a meta test.
Mm.
Y that's the first test. And similarly with GPs and LPs, that's kind of the first test. If it was just a manual to follow, then there wouldn't be any signal in in people doing it. Information asymmetry is so powerful, especially in venture. And especially as founders. That figuring it out is the first test. that you can find asymmetric information.
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Hi, welcome to another episode of How I Raised It, produced by foundersweet.com and fundingstack.com. I'm your host, Nathan Beckard, and today I'm with Kane Shea of Root Ventures coming to us from San Francisco. How's your day going so far? Pretty good. Uh excited to chat. Great. Well, let's jump right to it. What is Root Ventures?
Yeah, so the the simplest, most parsimonious way to describe root ventures is we are a dedicated pre seed and seed fund. Uh we are four GPs that all come from engineering backgrounds. Uh our junior investor comes from an engineering background, even our operations manager comes from an engineering background, and we want to be the first institutional capital into great technical founding teams. Uh historically we've experimented with more precise or prescriptive theses, but you know, uh in going into our fourth fund, what we've what we've come to conclude is we actually just want to let uh these founders kind of direct where where things are going and we'll focus on just great technical talent.
Okay. So let's let's get into that a little bit. So no specific thesis, you're not fintech, SAS, applied AI, something like that. You're fairly broad engineering founders or technical founder led. What else are the common attributes, I guess?
Yeah, I would say so you you bring up fintech. I we do have um not exactly a blacklist, but call it a a gray blacklist of categories where we do not have any particular competitive advantages, fintech being one of them. Uh healthcare being the other. Uh we as a fund we only do six to eight new deals a year, so they're very high conviction. We don't we don't have to lead, but we don't invest unless we are willing to lead. And so uh something that Every founder has probably been annoyed by is a a fund that says, Oh, talk to us when you have a lead or we're in as soon as you have a lead. Um there are some strategies there that work and there are funds like that that we also enjoy working with, but for us it's if we're in, we're willing to lead.
And if if you have a lead you like, we're willing to to work with them as well. So that's that's us in a nutshell. Uh high conviction, uh, high concentration, very few bets. So, you know, six to eight deals a year between four partners is At most two deals per partner.
Yeah. What are A couple of examples of recent deals you've done just to give audience a a flavor, a feel.
Yeah, so I would say that um Most recently that so this one hasn't closed yet. It's in the process of closing. So I'll I'll give a high level description. Uh found a fantastic founder from uh Androll and Apple, which is some pretty cool uh uh dual classing there. Uh that had also spent time uh and those are for for my for the listeners that like trucks and and redneck hobbies like me, he he ran production for Fox Performance Shocks uh as well. And he's working on Basically hundred to two hundred pound thrust jet engines, which is a a class of engine that didn't really need to exist before, but now there's a lot of demand for. That's a category we're pretty excited in. Um We are uh chasing down a deal that has to do with electronic component domestic electronic component manufacturing.
And then deals that
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Chapters
8 chapters
1
What is Root Ventures and how does it differ from other seed funds?
0:00–5:40
2
How does Root decide which technical founders to back and what are its investment criteria?
5:40–8:45
3
Which recent deals illustrate Root’s focus on hardware and deep‑tech founders?
8:45–13:01
4
Why does Root view chaos and disruption as an advantage for founders and VCs?
13:01–18:29
5
How can founders find their asymmetric information edge to get VC intros?
18:29–22:41
6
What AI tools does Root use for sourcing and evaluating deals?
22:41–26:33
7
What advice does Kane give emerging fund managers and first‑time founders?
26:33–30:10
8
Which books and resources does Kane recommend for navigating today’s venture landscape?
30:10–37:33
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