Ep. 236 - Allison Weil with Hyde Park Venture Partners on Midwest Venture Capital & Insights for New Founders - Replay

Inside Outside Innovation

On this week's episode of Inside Outside Innovation, we sit down with Allison Weil, Senior Associate at Hyde Park Venture Partners. Allison and I talk about some of the latest trends in venture capital in places outside the Valley. And we dig into some of the tips and insights for new founders.

Inside Outside Innovation is a podcast to help new innovators navigate what's next. Each week, we'll give you a front row seat to what it takes to learn, grow, and thrive in today's world of accelerating change and uncertainty. Join us as we explore, engage and experiment with the best and the brightest innovators, entrepreneurs, and pioneering businesses. It's time to get started.

Interview Transcript with Allison Weil, Hyde Park Venture Partners

Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I'm your host, Brian Ardinger, and as always, we have another amazing guest. We have Allison Weil; she is a Senior Associate at Hyde Park Venture Partners. Welcome to the show, Allison.

Allison Weil: Thanks for having me. Really excited to chat today.

Brian Ardinger: Have you, we've had a chance to work together a little bit. You were panelists at the IO 2020 summit and helped look at a lot of the startups that we had at the startup showcase. And you and I were on an investor panel for the Pipeline Entrepreneurs about a month ago. I realized we hadn't had a chance to sit down and talk more in depth about the life and times of venture capital here in the Midwest. So, I figured I'd have you on the show. How about you tell the audience about Hyde Park Venture Partners and what do you focus on?

Allison Weil: Yeah, absolutely. So, Hyde Park Venture Partners, we are a seed through Series A, venture capital fund, based in Chicago, that exclusively invests in companies in what we call the mid-continent. And we define that as the traditional Midwest plus Toronto and Atlanta. Most of our investments are in software companies. A lot of it is SaaS, but we're also investors in marketplaces and tech enabled-services and companies that we invest in can be anything from free product, you know, with a great team, all the way through a few million dollars in annual-recurring revenue.

Brian Ardinger: The new world that we're living in, the post COVID world, let's take a step back and over the last year, what have you seen? That's changed the dynamics of venture capital in this now post COVID world.

Allison Weil: Yeah. Great question. So, I think, you know, the first and most obvious thing is the shift to entirely remote investment. You know, prior to this past year, we really actually emphasize meeting our founders in person.

You know, you learn a lot when you meet someone in person that you can't over Zoom call, you know, or a phone call. And I think that's still true for the record. So, it's not a thing that I think is going to stay permanently. I'm not on a perma-Zoom bandwagon, but you know, obviously that was kind of the first thing is a shift to fully remote investing and investing without meeting our founders in-person at all.

The thing that, that enabled that's been different particularly in the Midwest, is it means that investors and founders don't have to be in the same city or location, which makes it easier for coastal investors to spend time with interesting companies in the Midwest. And so that's been a trend that we've certainly noticed a little bit.

The other thing that we've noticed, frankly is that investment hasn't slowed down at all. It might've slowed down for a little bit in March and April is everybody, ourselves included, took some time to like orient ourselves to this new world, like personal life, professional. Like what in the world is going on right now? Let's figure it out. What's going on with our portfolio companies, get everything stabilized.

But past that, investment's been going on rapidly and at high valuations, and the markets are shockingly hot. All of that is what I'm seeing, which is certainly, probably not what I would have anticipated, if you would have asked me, you know, the second or third week of March, like what's this next year going to look like.

Brian Ardinger: A number of questions come to mind after what you just talked about, one being, so you mentioned investing remotely. What have you learned about how you can read a person or what specifically is different about investing remotely versus in person and how have you adapted?

Allison Weil: What investing remotely requires you to do is spend a little bit more time just on having those conversations with folks over Zoom, right? So typically, you'd invest in person. You might go to lunch with somebody or dinner, you know, in the city, and just build that rapport. Right? Early-stage investment report is actually pretty important because you're building your relationship that can last a really long time.

And so, you don't want to cut that time short. You still want to spend lots of time with the entrepreneur. You still want to get to know them and you can do that over Zoom. Right? Like you can still learn about like who are you as a person? How do you lead a team? You know, how do you interact with people who are different than you? How do you make decisions and all of these things that are still important, you can pick it up via Zoom.

There is some stuff that you can't. I think some of like the interpersonal chemistry is a little bit different over Zoom versus, you know, in-person, but you still have to spend all of that kind of time getting to know folks. It just might be more sporadic than the concentration that you had, you know, when you traveled to their city.

Brian Ardinger: Have you seen founders address it differently or different ways that they've come across better in that particular environment?

Allison Weil: I rely more on quality decks than perhaps I did in the past. So, in that first conversation, if it was in-person, it's a little bit easier to interject and kind of read the room a little bit more and people over Zoom, the really good founders, are doing that over Zoom effectively. So, they are using a deck, but they're using it as a prop rather than as the center of their conversation. Right.

They're still reading my facial expressions. They're still figuring out, you know, if I have a question that needs to get asked or where to pause and where to keep going and things like that. And they're effectively guiding the conversation much more so. I prefer those kinds of intro conversations to be more like a conversation than a pitch.

Like I prefer folks to tell me their story, rather than walk me through their pitch deck. And so the best founders are using Zoom and are using their pitch deck to enable them to really tell their story, versus tell the story of their pitch deck. Those are two different things.

Brian Ardinger: Are you seeing more cold outreach than that? Or are you still seeing the same deal flow from other founders recommending or other venture partners and that recommending?

Allison Weil: I'm probably seeing marginally more cold outreach right now, but I don't think that that's a function of Zoom. I think that's a function of just some other things that we, as a funder doing and I'm doing. So, most of our deal fl...