Brian Garrett of Crosscut Ventures on building a regionally based seed firm outside of SV, the rise of LA, raising during a recession, and how Crosscut has evolved over the last 13 years.
Today, we’re seeing major startup hubs emerge across the US (and globally). Up until fairly recently, LA was not considered a major US technology and venture hub. My guest on this week’s episode, Brian Garrett, has been in the LA venture ecosystem for two decades now. He also co-founded Crosscut Ventures, one of the very first seed funds in LA (if not the first). Today LA has claims companies such as Snap, TrueCar, Maker, Honey, Dollar Shave Club, Honest Company as examples of companies that reached scale in the now rapidly growing ecosystem. Crosscut began as a very small vehicle of $6MM, but now has over 120 investments and is one of the largest seed fund platforms in LA with $300MM+ AUM. In our episode we discussed everything from the rise of LA and non SV tech hubs to fundraising during a recession to the importance of self-discovery and mental wellness. Today's Venture Unlocked is brought to you by Aduro Advisors.Aduro Advisors is the premier fund administrator for venture capital and private equity firms. Led by a team of industry veterans and powered by proprietary software, FundPanel.io, Aduro pairs best-in-class service with the robust and flexible technology that the industry demands.From emerging managers just starting out to seasoned firms looking to supplement an internal team, Aduro’s back-office solution rises to the challenge of supporting your firm’s specific needs.Listeners of Venture Unlocked receive the first quarter of management company services free with promo code UNLOCKED.To redeem, email [email protected] this episode we discuss the following topics:01:54 Brian’s journey into venture03:48 Why they started Crosscut in 2008, initially as a part time project06:31 Crosscut’s conviction on why LA would become a strong startup ecosystem08:28 The strategy for Crosscut’s early funds11:55 How they scaled to a true institutional sized fund in Fund III; did anything change?14:30 Mental model for investing based around ownership 15:13 Why Fund IV is the best indication of Crosscut and what is happening in LA17:22 Why big companies can be built outside SV20:00 Thoughts on sector focused funds22:36 Being local as an advantage29:22 Brian’s journey into wellness32:02 How being centered has made him a better VC, and how it’s shaped Crosscut’s culture34:02 The best piece of career advice he’s received35:53 His anti-portfolio37:50 The investor he admires the mostMentioned In This Episode:* Crosscut I’d love to know what you took away from this conversation with Brian. Follow me @SamirKaji and give me your insights and questions with the hashtag #ventureunlocked. If you’d like to be considered as a guest or have someone you’d like to hear from (GP or LP), drop me a direct message on Twitter.Podcast Production support provided by Agent Bee Agency This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit ventureunlocked.substack.com