Venture Podcast: Interview with Kelly Perdue

Introduction

• Host: VN, world's leading investors' community
• Focus: Learning from VCs and capital allocators
• Key takeaway: Diversification in investments (20-25 deals for optimal high-risk, high-reward portfolio)

Kelly Perdue's Background

• Education: West Point graduate, Military Academy (USA)
• Military: Second Lieutenant, Military Intelligence officer, Airborne and Ranger qualified
• Business School: JD/MBA program at UCLA
• Startups: Founded his first startup during his MBA program
• Experience: Operator in 10 different businesses with six exits, two ongoing ventures, and two learning experiences

Path to Angel and Venture Investing

• Initial Investments: Started small, both financially and through advisory roles
• Mentorship: Influenced by mentor Luis Villalobos (Tech Coast Angels, Angel Capital Association)
• Investment Strategy: Diversification (20-25 investments) to balance risk and reward

Investment Successes

• LinkedIn: Early stage investment, gained involvement through strategic outreach during "The Apprentice"
• Scopely: Investment exited at $4.4 billion
• ID.me: Online identity platform, on the board for 12 years; significant fraud prevention impact

Investment Decision-Making

• Volume & Diversification: Aim for 20-25 investments in various industries
• Pattern Recognition: Experience helps in identifying viable startups
• Critical Criteria: Founder's background, team credibility, market fit, and potential for growth
• Military Veterans: High trust and responsibility in managing other people's money

Challenges and Failures

• Missed Opportunities: Example, missed investment in Oculus due to scheduling conflicts
• Learning Points: Importance of showing commitment and managing investments wisely

Investment Strategy and Principles

• Focus on Late Seed Rounds: Companies with up to $1M in ARR
• Contribution: Value-added roles like advisory and board positions
• Exit Strategy: Diversify exits and take opportunities to secure returns

Fundraising for VC Funds

• First Fund Experience: Difficult, compared to milestone life events
• Second Fund: Raised during COVID, additional challenges
• Lessons Learned: Persistence, strategic planning, and value proposition are key
• Third Fund: Marginally easier, importance of performance metrics from previous funds

Living in Portugal

• Reason: Son's soccer career and family preference
• Impact: Continued managing US investments remotely, increased networking in Europe

Conclusion

• Importance of network, long-term relationships, and strategic value in venture capital.