1Mby1M Virtual Accelerator Investor Forum: With Bradley Harrison, Founder and Managing Partner at Scout Ventures (Part 4)

Sramana Mitra: Coming back to the venture discussion, what do you like to see before writing a check?

Bradley Harrison: We over-index on the founders. Our biggest thing is chemistry with the founding team. We try to make sure that we have that chemistry. In checking that chemistry, we plan on being partners with entrepreneurs for 10 to 15 years. If that goes well, we plan on keeping them in our bullpen forever. It’s a little bit of coachability and compatibility. We want to make sure that there are no issues with integrity or moral code. That’s the people side.

We also want to see that the entrepreneur can articulate a clear vision of what they’re trying to build and why it’s important. There are a lot of entrepreneurs that have great ideas that are just not venture businesses. They are great businesses and they can make a million or $2 million. They can be great lifestyle businesses. We’re fully supportive of that, but that doesn’t mean it’ll get the scale of venture businesses.

We want to understand the vision. We want to understand how it’s going to scale. Lastly, we want to understand how our special skills at Scout are going to help grow that business. What are the things that we bring to the table that help differentiate that company?

Sramana Mitra: When you do these incubation-stage ventures, what else is relevant for an entrepreneur to be considered for that?

Bradley Harrison: In that program, it’s about the person or people. Normally, it’s their background and what they’ve done that’s relevant to whatever they’re thinking about. We have an entrepreneur who we will move forward with who had experience at five or six major companies, was able to understand the way those budgets work in the context of growing customer audiences.

Out of that, he had a vision for a product that he thinks he can build that will help these brands acquire customers. It involves some AI. He knows the landscape. Then to some extent, intellectual horsepower. Being an entrepreneur is a lonely and stressful job. You’re looking for the right person in the right stage of life. I wouldn’t recommend anybody who just had three small kids and just quit their job. That’s not the best time.

I was an entrepreneur before and while I had kids. I was lucky that my wife was supportive. We had our team dynamics and it worked out. Another thing is being able to commit to the cycles. Most of our entrepreneurs tend to skew younger, single, coming off of some sort of corporate experience.

Sramana Mitra: What percentage of your entrepreneurs follow the path that you took? You did one of military schools and then you did MIT for business school.

Bradley Harrison: We launched something called the Academy Investor Network (AIN). AIN is designed specifically to help veterans and graduates of the service academies who are building businesses. They tend to be earlier in the lifecycle – pre-seed and seed. We hired two amazing people to run that. One is Sherman Williams and the other is Emily McMann. Sherman is a Naval Academy grad. Emily is a West Point graduate.

Sherman is out west right now helping run TechStars. That seems a lot more like entrepreneurs with a service academy background. That’s really a feeder for what we’re doing at Scout. At Scout, maybe 20% of the founders come out of the service academies. We have a team out of the NSA and CIA.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Bradley Harrison, Founder and Managing Partner at Scout Ventures
1 2 3 4 5