Brandon Farwell, General Partner of Xfund

Insights from a leading early-stage investor

It was super fun to host an Icons dinner with Brandon Farwell, a General Partner at Xfund. We learned so much from Brandon about a wide array of topics. Thanks so much, Brandon! Thanks to Asset and Asror from Silkroad Innovation Hub for hosting us! Takeaways below:

Xfund’s Approach:

·       Pre-seed and seed investing - first money into companies 90% of the time and as lead or colead.  Many times tipping them into existence 

·       Concentrated strategy (25 portfolio companies in last $75m fund) with heavy reserve ratio to double down and support the breakouts

·       Build real relationships with founders and provide hands-on support from the beginning

How does Xfund Support Founders?

·       Top talent pipelines – Xfund can help founders recruit the best young engineers through its deep institutional relationships with universities like Harvard (Xfund's cofounder) and Stanford.

·       Unlock university assets for founders – Xfund can connect founders to Nobel Prize winners, top researchers/luminaries to serve as advisors and even help negotiate licensing deals for access to special datasets + research held by universities.

·       Differentiated fundraising support – Brandon and Patrick have decades of experience in VC and can connect founders to specific partners at top firms who would be ideal partners given their background and track record.  That's proving out well in their seed to Series A and beyond graduation rates. 

Three Important Lessons:

·       Have a diverse group of mentors. While at DFJ, Brandon had the opportunity to learn from Tim Draper, Steve Jurvetson, and Josh Stein – three legendary investors, each with different styles and focus areas (ex: enterprise SaaS, spacetech, mobility/autonomy). This provided him a unique perspective, and his current approach reflects a combination of these three mentors.

·       "Hey students -- use LinkedIn!" Leverage your university affiliation to connect with, meet, and learn from interesting alumni.  Be proactive and politely relentless. 

·       Help before asking for help 

Three Key Questions for Founders:

·       What’s your founder journey?  ie your novel and unique insight about how to address a problem. 

·       What’s your unfair advantage?

·       Why now?

Two Key Reasons Startups Fail:

·       Bad Timing – too early

·       Insurmountable co-founder conflict

Fundraising Advice for Founders:

·       Pick the partner(s), not the firm

·       Call portfolio company founders to determine the VC’s true value-add; aim for ones that didn't have the best outcome 

Which VC Firms Does Brandon Admire Most?

·       Union Square Ventures and Floodgate have achieved exceptional returns as seed funds and retained discipline in terms of fund size, sticking to their core competency and strategy.