412 Ventures is an early-stage investment fund that invests in companies that have their first product out in the market and maybe a customer or two, and they typically invest at the seed or early Series A stage.
Ilana Diamond, managing partner at 412, says all of Ventures' general partners are founders who have grown, scaled, raised money and exited companies.
"We believe that that experience of having been in the founder's shoes is especially valuable at the early stages of a business," she says. "Once you get a little later stage and you're thinking about an exit or other financial aspects of the business, having investment bankers and people with a financial background makes a lot of sense. At the really early stages, we believe what companies need is people who have taken a team from one or two people to hundreds of people, who've taken a product from something that just kind of barely sort of works to a scalable repeatable product that customers are excited about, who've taken a business model from maybe giving it away and trying to figure out what customers will pay for to a business model that works for both the company and the customers. And we roll up our sleeves and do that together with our founders."
As a founder herself, Diamond says one of the key lessons that she passes along based on her experiences that most founders have different roles in their lives that are important to them. That could include being a friend, a spouse, a family member or a parent, in addition to running a company. So, she tries to get across to founders that every day there's going to be something that's most important. They need to know what that is.
"You're juggling a bunch of glass balls," she says. "You're probably not going to keep them all perfectly up in the air. Just be sure that the one that falls is one you can afford to lose for that day. You need to know which things are important — which things are rubber and will bounce, and which things are glass and they'll break if you don't catch them. And give yourself permission not to be perfect in every role every day."
Also, as a female founder and a CEO at a time when she was often the only woman in the room, and as a parent with young children at the time, she says it was really important that some days she had to be a better partner and her team members had to pick up the slack. Other days, they needed to be a parent and she picked up the slack.
"And I think that's lesson No. 1: if you don't have all the pieces of your life running together, you're not going to be a good CEO either."
Another lesson she tries to impart is the most important thing is the people you're working with.
"There is nothing that'll bring a company down faster and there's nothing that will make it more of a joy," she says.
Diamond spoke on the Smart Business Dealmakers Podcast about launching 412 Ventures, its investment thesis, and how their collective experience as founders might give them an advantage. Hit play to catch the full conversation.
