Mat Vogels (00:10)

everybody, welcome to another episode of Fundraising, a podcast where we interview early stage investors and ask them all the questions and give you the tips and tricks as a first time fundraising founder on how to navigate the fundraising process. And today I have a very special guest.

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Adam Hammer, CEO of both Roadrunner Venture Studios and Roadrunner Fund. We're to talk a little bit and go deep on how sometimes having kind of the tandem there, kind of similar to what we have at Harpoon with Black Flag, can be a huge advantage for you as a fund, but then also for the founders that are looking to apply and get in touch. But let's kick things off maybe, Adam, with a quick overview summary of maybe both of those, the fund and the Venture Studio.

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and what you're investing in, average check size, high level overview.

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Adam Hammer (01:01)

Matt, it's great to be with you. Let's start with Roadrunner Venture Studios. That's where we started the journey in 2023. So Roadrunner Venture Studios is a deep tech company creation factory. based in Albuquerque, New Mexico, and we're focused on advanced manufacturing, advanced energy, and advanced compute. And like traditional Venture Studio, we're building really from the ground up.

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So yes, it's a venture capital platform, but fundamentally what we're doing is building businesses alongside founders. We launched the Roadrunner Fund to what you mentioned in 2024. It's anchored by a $50 million commitment from the New Mexico State Investment Council. We invest in pre-seed. The fund is largely investing into the companies coming out of the studio that also can invest opportunistically. Average check size is about a million bucks. And again, we're focused on

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companies that are coming out of national labs, university labs, corporate labs, and working with deeply technical founders.

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Mat Vogels (01:58)

that. What are maybe some of the benefits, this is a question we don't get to ask a lot of folks, the benefits from a founder perspective in considering either applying to a program like yours or reaching out to a fund like yours? Because I think that tandem again is a huge value add.

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Adam Hammer (02:13)

Yeah, I mean, you guys know this well. I we fundamentally believe that building a deep tech company is unique. It's not like building any other type of company. Frontier technologies just have a different shape to them. They are more capital intense. Oftentimes, there's longer gestation periods. The customer process looks a little different. The engineering process looks a little different. And so what we're building is a model that's purpose fit to building companies in frontier tech. What that means practically is

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We have engineers on staff that actually help you with accelerating the de-risking of your technology. We focus on ways that we can productize those deeply technical innovations and bring them to market. We focus on the capital stacks, so not just the money that we'll put into the deal. We also syndicate deals, we also have a great track record in attracting non-dilutive funding and also debt and other types of capital. So fundamentally, the advantage of a studio is this all in,

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hands-on process that is more than just capital itself to really accelerate these companies to market.

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Mat Vogels (03:18)

I love that. And I think especially you mentioned a lot of the folks that are coming to you are coming out of some of these really top university programs or labs where they're obviously very smart and from a technical side are maybe some of the best in the world, but they maybe lack on some of the go to market, running a business type of things, which makes it a perfect place for those folks coming into a studio like this. I love that.

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Adam Hammer (03:31)

Yeah.

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Exactly right.

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Mat Vogels (03:44)

All right, let's dive into some additional questions, why did you choose to get into VC? Why was this something that you decided to do and maybe even talk, because it was the venture studio first, correct? And then going into the fund. So maybe hop into why the addition of the fund ⁓ as a choice too.

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Adam Hammer (04:03)

Yes. So I think about my career in sort of three buckets. So the first one is I started my career in investment banking. I worked at Goldman Sachs. And really what I did there is learn the fundamentals of how to value companies and also learn the power of capital markets. I took that experience and then

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moved to that second bucket where I worked for Eric Schmidt at his family office. And then after that, I jumped into a post quantum encryption quantum compute company. And those experiences were really about deep tech. So that's where I got hands-on on frontier technologies. And I started to really understand this waning valley of death from lab to market. And...

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to what we just discussed earlier, you need more than just capital. VC alone isn't enough to catapult some of these truly disruptive technologies from technical communities to VC, to customer, to industry. And that really informs that third bucket, which was Roadrunner. We started with the thesis that we need a new type of platform that partners with technical founders to create companies from the ground up. And again, the idea is get there faster.

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and get there with the team that on day one you can't afford, but that we bring to the table as your co-founder. And that was really the thesis around Roadrunner Studios. And then following that, we decided we'd build a fund adjacent to it to help provide extra capital, extra support, and go the long run with the companies that we're building.

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Mat Vogels (05:29)

That's awesome. It's such a, again, it's a perfect combo. I'm to say that a lot this time, because I think it is. told you before this, think Roadrunner Venture Studios was something that I was inspired by. I was actually one of the inspirations even on the black flag side. So again, huge fan of what you're doing there. And you just echoed, think, why the combo works so well. Next question here. This is one of the more common ones that founders always like to hear about, which is, what is your favorite part about the job and being a VC? And then what is your least favorite part about the job?

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Adam Hammer (05:55)

My favorite part of the job is I get to work with some incredible people. I mean, I...

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I love the types of founders we're working with. They're oftentimes inventors. They're oftentimes folks that wouldn't have thought of themselves as builders or doing anything with venture capital. They're imaginative and they're fundamentally problem solvers. And, you know, my favorite day at work is getting inside the business, helping them think through product, helping them think through customer. You know, I think through many of the companies we're building now. And my favorite days are when I'm on the factory floor, taking a look at the prototype, working with the technical teams.

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and really hoping to be a value add.

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Mat Vogels (06:32)

That's awesome. What are some of the things that you wish that maybe founders better understood about the day in the life of a VC? Because I think again, the reason we asked this question is I think founders, not that they think of VCs in a negative way, but I think sometimes they do. I know when I was a founder, there's times where you hate VCs. What are some of the things that maybe you could shed some light on to help alleviate some of that peek behind the curtain, so to speak, on what it is to be a VC that more founders should be aware of?

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Adam Hammer (06:50)

Yeah, totally.

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I mean, I get the frustration. I too, like you, Matt, was frustrated with the VC from outside. And I try to remind myself of all the reasons as a founder why I was like, why am I answering these questions about your exit multiples and so on? Like I'm building something and I think it's gonna solve a really big problem. Just bet on me. And I try not to forget that frustration. I mean, think now that I sit on this side of the table, a couple of the things that I think are helpful are one,

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VC is fundamentally like, it's a pattern matching machine. I think deep tech founders often just don't fit the pattern.

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And I think I say this to many of our founders. I think some of the most technical founders are just mispriced, right? And misunderstood. And for us at Roadrunner, that's part of why we exist. It's an opportunity. We think that there is a tremendous opportunity to build some great companies out of some of these technical communities, and there's not enough ways of interfacing with them. But again, investors, you know, they need to see the market as clearly as the science.

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And a lot of times, the most technical founders undersell that second half. You need more than just venture capital. You need really a support system to pull these out of the lab and build these companies quickly.

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Mat Vogels (08:15)

I agree with that. You mentioned obviously you're investing abroad across a lot of highly technical areas. Are there any particular problem sets or sectors or industries that you are, it doesn't have to be like the most exciting, we're not picking favorites here, but maybe at this moment right now, you're really excited about over the next few years?

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Adam Hammer (08:33)

Oh, yeah. Maybe two I'll mention. One is quantum. mean, we have been doing more work in quantum over the past year. Roadrunner won a $25 million grant to build a next generation quantum lab in New Mexico.

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And I have some background working in post-quantum encryption and quantum hardware. And fundamentally, when we were building that, a lot of the work at that point was still theoretical. What gets me excited is we're starting to actually enter real-world deployment. And what I get fired up about is New Mexico is at the center of this. I think it's going to be the home for advanced quantum and advanced compute in the country and probably globally.

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Second area I'm excited about is advanced manufacturing. I mean, there is enormous national security stakes. It's fundamentally been under-invested by venture capital until recently. We're spending a lot of time there. I think there's some tremendous innovations that are coming to market. There's some great founders building. We're partnered with a founder that's building a new way of creating ship holes. I mean, the stakes could not be higher.

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and there's certainly a lot of momentum around reindustrialization. So I'm excited about manufacturing quantum right now.

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Mat Vogels (09:40)

Those are great. It's funny in Colorado, we like to think of ourselves as the leader in quantum. We'll have to jam about this later because I'm still, I need to learn more about it. Cause I still am not a non-believer, but I think there's more that I need to learn about it. So we should definitely jam in a different date around that. Cause there's so much opportunity there. And on the re-industrialization and manufacturing side, I think one of the things that's so exciting about that is that, A, there's so many founders that are choosing to go on that journey. But B, I think from a funding perspective,

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Adam Hammer (09:44)

I know.

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Mat Vogels (10:09)

it's going to be a trillion dollar investment across all these different companies and infrastructure plays. There's so much opportunity across the board there. It's going to be an exciting decade to bring all those jobs, the technology and innovation in manufacturing for sure. All right, final question here on this section. It's kind of a way for you to stand up, be proud about it. Why should founders pick you and or Roadrunner?

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Adam Hammer (10:27)

Agreed.

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Mat Vogels (10:38)

to be on their cap table. You already hinted at a few of those, but any others that you want to talk about?

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Adam Hammer (10:43)

But I think fundamentally deep tech requires more than just capital. is the ground truth that we live by at Roadrunner. In fact, we tell this to our founders all the time, capital should be the least valuable thing we provide. What we hope to bring to the table is that team that you need on day one and with the experience, mean, decades of experience across the team building deep tech companies. We've got folks who have licensed hundreds of things at the labs. We've got folks who know how to...

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productize technologies and things like quantum and advanced manufacturing and robotics. We have an executive search and talent function to help build your team, find your co-founder, and you're getting all of this in one. And at Roadrunner, what we're trying to do is systematically de-risk your company. And from a nuts and bolts standpoint, the value proposition is you're going to get there faster, which means the time it would have taken you to get to prototype and get to that next round, we hope to do it in half the amount of time, which means less dilution.

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which means getting there faster in some of these category defining businesses. That's where you should work with us.

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Mat Vogels (11:43)

Great answer, great answer. Okay, into the fundraising process now. Again, we break it up into three different parts. The first is getting in the room. A lot of founders that are listening to this, they might be in places like Colorado or New Mexico. We're not known necessarily, although we're getting better at some of the venture capital communities that we have, but that means that the networks might be a little bit lighter than what they might need to raise their first rounds of capital. So maybe framing that, how can founders think about

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they're starting this journey. The first question is, which investors should they start going after? What advice would you give a founder? Is there indexing or trying to build up the characteristics of the funds that they need to start building that list around?

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Adam Hammer (12:23)

Yeah, the investors in the space and who you decide to partner with is critical. Look, in some of these frontier tech spaces, domain fluency really matters, right? Vague enthusiasm, chasing the curve is not the same as conviction. So I'd suggest to founders, have to ask whether they've worked with technical founders before.

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and understand also what their timeline alignment is. So oftentimes the types of builds that we're doing, like I said, in quantum or advanced energy or advanced manufacturing, these will take a decade to see through. Not all investors are truly gonna be along for that journey and might actually start feeling pressure around return timelines. Deep tech takes longer.

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Fast exit money is a slow motion problem. So make sure you really understand what their conviction is, what kind of fluency they have in the areas you're building, what they can bring to the table beyond capital, understand their timeline allowment. And then finally, everything in this space is relationships. This is fundamentally a people business. So are they gonna push you? Are you gonna learn from them? Will you grow from them?

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These are what I'd recommend founders really try to index on. It is a relationship business. So do you like, do you trust the people that you're building with and will they make you and your business better?

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Mat Vogels (13:37)

That's a answer. Let's say they've made some of these lists. They have a hundred or so investors they're gonna start reaching out to. What advice would you give them? What's the best way for them to get in front of those VCs? Cold outreach, email, warm intro. Can you talk about some of the different ways and which ones you think are best?

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Adam Hammer (13:43)

Yep.

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Well, to the point earlier around being a relationship business, the best way possible is to try to get a warm introduction from somebody that investor trusts or knows. I think back on our experience at Roadrunner, some of our...

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Most of our companies, frankly, have come through the network, be it a lab partner, a portfolio founder, coalition member, or a fund that we work very closely with. So to the extent possible, try to triangulate. this person I know works at this fund. I have a buddy who raised money from them. Try to find some way where you can get introduction in the door. And again, I think when you start that process, always start with you.

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Always think about the problem you're solving and fundamentally who cares. Too often, think particularly again in deep tech, people will lead with, here's my patent, here's the innovation, I figured out how to do this, but who cares and who are you? Because in the early stage, I'm betting on you as a person. Your company is probably gonna pivot. It's gonna change, but start with who you are, why you're obsessed with this problem and what your unfair advantage is.

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Mat Vogels (14:56)

Do you feel like, feel like that's changed a little bit over the last decade as we've kind of merged as an industry, I think across BC from software into hardware. Cause I think in software times, you really did have to double down on why you, what's the unique advantage in your software versus all these other ones and your go-to-market advantage and your moat and all these things. It seems like in hardware, we have to kind of assume that the founders like their technical ideas, all these things are going to work. But the real hard part is figuring out

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if they're the right founders to do it and go on that 10 year journey. And so I think that a lot of founders listening to this are almost playing off of a SaaS playbook, but the playbook has kind of changed and that pitching yourself is almost more important now. Not that it wasn't important back then, but it's almost more important now I think in this world of hardware.

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Adam Hammer (15:45)

Yeah, I think you're right. mean, in my mental model, I always think that the founder is the moat, right? And it's not commercializing a widget. Your company is not a widget that you've invented. You are the company. And I think, I guess, the thing that often hardware founders miss is, again, how urgent is the problem? How big is the problem?

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Mat Vogels (15:51)

Mm-hmm. Yeah.

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Yep. Yeah.

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Adam Hammer (16:08)

Who cares about it being solved? And what is your unfair advantage? Not just, did this research, I'm now commercializing this research, but we're also betting that you're gonna continue to push the envelope. So yeah, I totally agree. The founder's at the center of the note.

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Mat Vogels (16:20)

Yep.

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So that kind of ties into the last couple of questions on here. I the pitch deck and kind of the cold outreach. I always like to say that the fundraising process is like lots of little steps. One of the little steps is going to be writing the right blurb in the email. Maybe it's the blurb that you pass along for somebody to make that warm introduction to. It's that piece that has to tickle your interest enough to then get to the pitch deck, which is that next piece. The pitch deck has to, again, to get your interest enough to then schedule a meeting. So in both of those, you mentioned team multiple times. Is that what you're kind of looking

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for both maybe in the blurb but then when you open up that pitch deck after you're excited about it are you going right to the team too and trying to figure that out is there any any other slides and or maybe double down on on what founders can do to make sure that they're standing out in that area

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Adam Hammer (17:06)

Yeah, it's a great question. I I find that in this space, there is a very traditional failure mode and it is a technology that's looking for a market. So one of the first things I think about immediately is, can I validate that this is a problem that needs to be solved?

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And I mean, just to get concrete so it doesn't feel abstract, assume you're listener. It's like, you should be thinking about what product, what business does not exist or does not come to market because you are not there. You should think about, you know, another mental model. One of my colleagues and mentors, Steve Weinstein, who you may know, has done a lot of the hacking for defense. He always says, who is that customer that's going through the desert?

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and sees this oasis, this water, says, my god, give it to me. I need it so badly. Like, that's the type of urgency and necessity around the problem.

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that I look for in deep tech that is not always there. Yes, you have a great invention that might solve something, but what I'm immediately looking for, team first to is this a real problem? Is it big enough for venture capital? Is it urgent enough? And do you actually solve this in some differentiated way that somebody's out there that absolutely needs you for their business to work?

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Mat Vogels (18:17)

Yeah, market pull is still, it has to be the first thing. Is there a market pull here to do that? And then again, this is where I mentioned earlier, I don't think you need to spend as much time if it's, the best ones are almost always obvious, right? It's a, I can understand why that needs to exist and why these customers are going to obsess over it. I think founders sometimes spend too much time than having to double or triple down on why it's a market. Sometimes investors get it right away and then going into more why you, why are you the one to do this specifically?

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Adam Hammer (18:41)

Yeah.

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Mat Vogels (18:46)

on a team slide, because that's when we get a lot of questions on here. What stands out to you on a team slide, whether it's visually, like what makes an actual good team slide itself, and then maybe what makes a bad team slide that people can maybe avoid.

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Adam Hammer (19:00)

Yeah, so

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I don't think that teams have to show that they've been obsessed with this particular intervention or this particular product since day one. Like, let's be honest, people pivot, they change industries. So I don't need to see that. The thing that I do need to see is some, again, some unfair advantage around the problem.

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And again, that can mean for a non-technical founder, can mean proximity to the problem. Like, I have experienced this. I'm thinking of a founder in our portfolio that worked at the refinery at ExxonMobil and day in, day out, experienced a pain point that her and her colleagues, that she knew uniquely. And she understand how the customer would adopt that. Like, I want to see that cheat code around that problem set.

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in each of the members of the team. And then when I think holistically as a roster, what I'm looking for is like, is this a sum greater than the parts? Like, okay, we got the person who understands how to raise the capital, understands the business, have this technical founder, who's thinking about manufacturing, who's actually taking one of these to market. Each of these elements piecing together, that may not be evident at pre-seed, but that's how you wanna start to think about what are the holes in the business? How does my roster, my team show that?

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proximity to the problem, our unfair advantage, and that we have a pathway to building a roster that's some greater than the parts.

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Mat Vogels (20:16)

I love that. So let's migrate this now into the second phase, which is the first initial meeting.

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It's 30 minutes usually. Sometimes it feels like less, it goes by like this. It's such a pivotal point because it's so much of the investors process, know, don't judge a book by its cover, first impressions, all those things come into this first initial meeting. You as a VC, when you're meeting a founder for the first time, you you hinted at some of these things that you're looking for beforehand. I'm sure a lot of those things apply into this as well. But can you maybe talk about what you are hoping to get out of that first initial meeting from meeting a founder?

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Adam Hammer (20:51)

Yes,

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and maybe I'll, so I won't repeat myself, I'll try to add a couple unique things that we look for, I look for personally. So when I'm looking for intellectual honesty, know what you don't know yet. And I think that that is...

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really undervalued. look for it in the initial meetings that we're having. I'll try to ask some questions purposely that I think they may not have the answer to. Either it's too early or they haven't thought about it. That's okay. I'm actually trying to understand how you react to new facts. And when you don't know, you're not gonna know all the time. Me as a leader of my company, I don't know all the time, but how I react, I learn is part of what makes a good team, what makes a great potential founder. The other thing I'm looking for is,

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You know, I like to look for what I'll call profits, those that can see something in the unseen. And I have a lot of respect for many of the founders that we work with. They see a future that maybe I don't see yet. And so I'm trying to understand, okay, what's their mental model here? Why do they think that this is going to be more important than I think it will be in the next few years? And so show that. mean, show that in that initial meeting. I have a vision for the future that is X. Here's why I think that. Here's why I think this is important. Here's why I think the market hasn't woken up to this yet.

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So show some of those colors, show that intellectual honesty, show the future that only you can see, and then back to what we said earlier, do try to hit on your domain credibility because fundamentally it's a bet on you that you have some session on this problem and you're going to figure it out.

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Mat Vogels (22:13)

Couple of the rapid fire questions the founders are always curious about. do you like seeing a pitch deck? What is a pitch deck's role in the initial meeting? And do you usually see a pitch deck before and then do you review it before? Or are you going into these meetings usually pretty cold? That kind of translates obviously into whether or not you need a pitch deck in that first meeting. This is all to say that a lot of founders, they don't know and so they end up having a pitch deck up and then they...

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go through a pitch deck for 25 minutes and then they're like, we're out of time. And then it's all done. So it's like, how do you balance that from your perspective?

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Adam Hammer (22:45)

Yeah, great question. So from my perspective, the things that I like, I always ask for material ahead of time. My preference is frankly, is if you have something written in narrative form, it doesn't need to be a deck. It can be a one pager, it can be a two pager. But I actually really like to understand, okay, what problem are you solving? What's the product you're building? What's the key technical innovation here? I like to kind of work through that. And if I can get that ahead of time, I am so much better prepared.

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for your meeting because founders spend a lot of time prepping for us. I prep a long time before every meeting I take with the founder. It makes the meeting better and it's had a respect for what they're building.

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In the meeting itself, I think a deck is very helpful, but the big caution is it does not need to be wordy. In fact, some of the best decks I've seen have been graphical or animation. You can think about, hey, I'm building a new type of composite manufacturing process. Here's an animation about how this works. And I find that what we do is we actually spend 25 minutes on that slide alone. I'm like, okay, walk me through it. And what happens here? And this is important for what? this industry is doing it this way, right? And you're doing it that way. I like really visualizing can make things feel less abstract.

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and more concrete. So I'd say absolutely to the pre-work and then less wordy, more visualization on the deck you're actually presenting.

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Mat Vogels (23:56)

Yeah, I was going to tell founders that it's I think it's always a red flag. If you show up to an investor meeting and you've sent them materials ahead of time and they have not looked at them or they're starting from a blank slate, it's going to be a really tough hill to climb because now you got to cover so much extra ground very quickly without sounding too quick or too wordy. So, yeah, send materials ahead of time, make it easy for them to digest it. And then hopefully you can roll into a meeting and not have to double back on some of those things.

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Adam Hammer (24:03)

Yeah.

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Yeah.

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Totally agree.

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Mat Vogels (24:25)

No, other quick question was, do you like seeing multiple founders like founding team on there versus just the CEO or one founder, any preference there? Yeah, of course.

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Adam Hammer (24:35)

No, not a strong preference. mean, eventually I want to meet all

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the people on the team, but in the first meeting, no, it's okay if it's just the CEO and founder. It's also okay if it's, you know, for instance, the CTO and co-founder or multiple team members.

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Mat Vogels (24:48)

Yep, perfect. What are some of the questions that founders should ask of VCs during this meeting? Because it should go both ways. And I think a lot of times it's good for founders to take ownership in these conversations. And you have to do it in a way that doesn't feel arrogant or bossy or demanding. But there are questions that you should ask of the VCs in this meeting. Any feedback or questions you think they should ask?

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Adam Hammer (24:59)

Yeah.

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I mean, I do think it's important for founders to ask, you know, other than capital, give me an example of how you've actually driven a value inflection in a business you're building. And to me, that is maybe it's a bias for the type of investor that we seek to be. It's not I'm going to show up at your board meeting, write you a check, check in maybe once a quarter. No, no, no. I mean, what is a way that you've gotten into my business and you have unlocked something? Remove your check.

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I'm talking about your network, I'm talking about your personal capital, I'm talking about your competency, I'm talking about your coaching. I think they should ask about that.

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Mat Vogels (25:45)

And almost to give specific examples to your point where they can't just sometimes I hear from founders and VCs where it's like, our network is great. And that's where the answer ends. And it's like, well, okay, great. Like, what does that network look like? Everybody says network. So yeah, ask for specific examples on how they did that. And a lot of good VCs, they'll have those answers ready. Cause we also have to fundraise and pitch those value adds too. And we're always trying to pitch founders as well. So good VCs will have the answers to that pretty quickly, I think.

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Adam Hammer (25:53)

Yeah.

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Agreed. And you should go talk to the founders and that company. ⁓ Every company that we think about bringing into the studio or to the fund, we have them meet other founders. But if the VC is not, you should be asking, hey, who else can I meet with from your portfolio? And ask the hard-hitting questions. The founders of the portfolio are going to give you real answers.

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Mat Vogels (26:14)

Yeah.

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And I think that that kind of ties into the next phase of the fundraising process. We'll jump into now, which is after that initial meeting, especially if the investor is interested and you're kind of in this end game approach, there's a lot of back and forth. Definitely asking for, for founder intros and asking for it. Cause I think that again, it's a long journey founders are going to have the secret sauce. They're going to be able to tell exactly why. And it's a tough thing to be. think that a lot of founders will, you know, they, don't want to speak badly about their investors. So you'll have to take some of it with

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grain assault, but you will get true benefits on why XYZ fund was better.

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Adam Hammer (27:07)

Yes, I agree. I mean, that is really where you're going to get the ground truth, in my opinion.

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Mat Vogels (27:11)

Yes,

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absolutely. What are some of the things like during this process? Again, it's a lot of herding cats from a founder standpoint. You're trying to bring a lot of investors together. You're trying to build momentum. You're also trying to create FOMO. It can be hard to do any feedback for founders on how to walk that line during this phase of, you know, there's a lot of diligence going on. It's going to feel very chaotic. Any feedback you give founders that are there?

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Adam Hammer (27:34)

Yeah.

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A couple. I one, I really appreciate hunger from founders that we're evaluating. Again, it's different when they've said, hey, it's not a good fit. It's not an invitation to continue to ask, but it is, hey, we're interested and we're doing our work. I'm never bothered. And I think it is, it's perfectly reasonable and expected for a founder to ask, where are you out in the process? What else do you need from me? Who else can I connect you with? That's appropriate. You should show that hunger.

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And again, if a VC is not responding well to that, they may not be the right partner. But I often coach founders in our portfolio to state something along the lines of,

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This route is moving really quickly and I am trying to manage this to completion so I can get this wrapped up. I'm going to be checking in every couple of days to see progress. know, ahead of time, I just want you to know I might be annoying, but what I care about is I want to get this done and I want the right people. like, tell ahead of time that permission, by the way, it's going to go a long way. I think that most VCs that you want to work with are like, yeah, man, I hear you. That's great. I'm along for it.

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Mat Vogels (28:36)

Yep. VCs want to move quickly too. More often than

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not, we need to move quickly as well. Cause we have to make decisions that we rebalancing, you know, 10 or so at a time.

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Adam Hammer (28:41)

Total.

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Mat Vogels (28:46)

any common mistakes that you see founders make during this phase where they are maybe trying to push too much on the FOMO. You mentioned, I mean, being annoying is okay as long as maybe you're upfront about it to your point, but any other notes that you'd have founders take on this that it's like, don't do that. That's a red flag.

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Adam Hammer (29:05)

I think a couple of things. One, I'd say when it comes to just kind of round dynamics, don't get too preoccupied with the nitty gritty of what I'll call marginal numbers on valuation or mechanisms. Like, I find suddenly you start to get sidetracked on elements that, again, are not.

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the critical elements to the deal. And that starts to become a red flag for investors because they start to feel like you're optimizing around the wrong things. So just be careful about like, keep your priorities straight. The most important is the fit of the people you bring around the table. Do I have the right investors around the table? Is this a fair and equitable deal? You don't want to negotiate it to the nth degree. You really want to keep pace moving and you want to get back to building your company. That's a good signal. Spending too much time rotating, not a good signal.

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Mat Vogels (29:46)

I agree. think that for first time founders is especially hard because it's maybe for the first time ever. Investors are very cool to founders. To have an investor that's chasing you and it's just like having the most attractive girl in school that's running after you. You end up getting stuck in this ego bit and sometimes that can hurt. And I've seen founders multiple times where they lead with it and then all of a sudden very quickly the tides turn the other way where all of a sudden that investor that

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Adam Hammer (29:54)

Yeah.

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Yeah.

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Mat Vogels (30:14)

thought was very interested but they pushed a little too far is now out and then because that investors out this other investor that was potentially going to be in is now also out and the other thing too at VCs we all talk to each other so when one drops everything kind of can fall apart just as quickly so I agree to that you have to be very careful and don't get too deep into some of these things that they matter of course you don't want to if you mentioned fair deal if it's a fair deal take it don't get greedy with it if you can

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Adam Hammer (30:23)

Totally.

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That's right, and these are two-way doors. Like your cap table is gonna evolve. Your company is a living organism. It's gonna shape and change and so on over several rounds. Like too often, early stage founders, even if it's the first company, they think, my God, I'm gonna set the cap table. I'm gonna make some decision that I can't unwind. It's not the case. I mean, generally, it's gonna be all right.

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Mat Vogels (30:43)

Mm-hmm.

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Any other feedback you'd give to founders if they are in a position where they have to kind of pick and choose the right investors, if you have three good lead investors that are excited to jump in and maybe a handful of other smaller investors that want to get in but you don't have that much room left in your round, you kind of have to start picking and choosing a little bit. And it's a good problem to have and it sounds like a lot of founders listening are like, I wish I had that problem. But it can be very stressful. And it feels like you have to say no to these people.

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Adam Hammer (31:17)

Yeah.

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Mat Vogels (31:26)

How would you tell founders to pick the right investor? You've already said a lot of great feedback on, know, showing the value beyond money, all these things. But any other advice do you give founders on picking the right VCs in this first round?

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Adam Hammer (31:40)

Yeah, relationship. mean,

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I, there is no substitute to getting on the plane and meeting with folks. And personal mantra for me is I never do a deal. We never bring into somebody in the studio or make an investment without me having dinner with them, a meal.

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And oftentimes that meal isn't even talking about the deal or the business. It's just getting to know each other and spending time as humans. Because fundamentally this is a people business. If you're choosing between investors, you've already thought about what they bring to the table, their capabilities, get on the plane, even if it's a small family office check. Take that flight to Dallas, take that flight to Austin, take that flight wherever, Colorado, New Mexico. Meet with them. They're going to be part of the journey with you. Figure out if it's the right relationship for you. If you vibe with them, if you feel like they bring something to the table. And then trust your gut.

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Mat Vogels (32:26)

That's excellent advice. All right, let's say that they've closed out their round.

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A very common thing that we see founders struggle with as soon as they close their round, they have to snap back in like fundraising mode and company mode are so different. They're so different. had Jake over at Felices the other day mentioned that founders spend, you know, two to three months optimizing and selling to VCs. But then you have to go back to selling your customers or your team. And the markets are so different. It's drastically different in some ways. What advice would you give founders as they go from fundraising

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back into company building mode and how that translates into how they have to think and operate for the first month or two after fundraising.

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Adam Hammer (33:07)

Yeah, it's great question. So two things I'd keep in mind. The first is that fundraising is intentionally a very...

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kind of stakeholder consensus driven process. You're bringing in people or you're building a big tent. And that is a very different business than how you run a team and how you run a business. I fundamentally building a company is about conviction, not about consensus. Oftentimes fundraising is about this sort of like, you know, bring everybody to the table, make everybody feel happy. Then when you put your CEO hat on or your CTO hat on, now it's about making decisions and moving very quickly.

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There's a cost to time which brings me to the second point You spend all this time fundraising and you're thinking so much about your burn and your milestones and and fundamentally it's all about capital capital efficiency and and you have to step back when you're finished and often what I see is that founders are too Fixated on how to conserve that capital When you finish your fundraise you are up against time. You're not up against capital

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It is how quickly can we move? So get out of the kind of dollars and fundraising and capital standpoint and get into the time standpoint and say, how quickly can this business get from A to B and do not be conserving capital. Do not play it safe.

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Mat Vogels (34:21)

Yeah, it's always a to be honest, hear feedback on both ways. And it's kind of funny. I don't know where I land on it. I've heard VCs on this podcast say the biggest mistake is they spend money too quickly. And there are other VCs where it's like they just don't spend money quick enough. Is it fair to say that there is like a line to walk in there? But I would agree. think it leans more towards the bigger mistake is not spending the capital quick enough in a way. But

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Is it fair to say that it is kind of a fine line to walk there too?

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Adam Hammer (34:49)

It depends on the type of business you're building. I'm coming from a point of view where we are working generally with technical founders and the instinct generally is to run the business like you were running a grant-based business. Most of the time, what I'm asking to do is make a mental shift.

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from scientist or researcher or technical CTA or whatever, into now you're up against time and you're not running a grant-based business. This is a fail fast mantra. There are four other people just like you building a business, just like you somewhere else, and they're moving quickly. And the question is how quickly can you learn and get on that learning curve? And so, yes, there's a line. I tend to find in early stage technical founders, they tend to be conserving capital and not optimizing around speed.

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Mat Vogels (35:34)

Yep, I agree with that. What are some of the ways that founders can, like expectation setting, maintain that relationship with their VCs? How have you seen some of the best founders with the company updates or those types of things as they navigate the first year or so after fundraise?

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Adam Hammer (35:47)

Yeah, it's a great question. mean, a couple tips that I've seen. One, I do think the...

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you know, be it monthly email, can be to each of your investors. can be, it doesn't have to be personalized, but I think just giving you here's what's happened in the business. Bullet points are fine. Again, visuals are strong. If you have a pilot where it be a customer pilot, it can be a demonstration, absolutely make it an open invitation to your investors. I get on the plane for every one of our business's pilots if I can. They'll get to see it. They'll feel connected to it. They'll be more bought into the mission. And then third, anytime that you're on the

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road, you should think, hey, which one of my investors and which one of our key partners are here where I am. I do this with RLPs. If I'm flying into Austin, I'm thinking, okay, who here am I building with or is an investor of mine and I should just go have coffee or just check in. Just have that mantra as well. Keep building your network and bringing people into the tent.

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Mat Vogels (36:41)

Looking a little bit further ahead. I think having a venture studio gives you almost a front row seat from building some of these businesses It also means that you get a first row seat of seeing a lot of these companies not work out What is one of their common reasons founders can start thinking about even in the early stages on? Why or how their company could not make it or fail in the end?

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Adam Hammer (36:48)

Yeah.

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Well, two things. One, one of the fundamental inflection points for business at a very early stage is becoming a talent magnet.

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And you have to, when you're an early founder, yes, you spend a lot of time and the investors are focused on you, you, you, you. But really what you're doing is trying to attract people that are smarter than you to join the business. That's the expectation of the investors, expectation of the customers. And so you have to make that mental switch that you are building a team, you're recruiting this, not a one man or two man or two woman show. This is about building a roster of people. So that's one, becoming a talent magnet and making sure you kind of make

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that mental switch. That's a failure mode. The second is back again to thinking about timing. know, so often in these frontier tech spaces, there is a window of opportunity. You know, like we said earlier, that's happening in advanced manufacturing, it's happening in quantum. There are many people sprinting in that direction. You're being invested in because you have a lead. You have an advantage, but that advantage can slip. And so you have to continuously think about how do you stay ahead of the curve? How do you keep pushing and keep driving forward?

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really, really quickly.

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Mat Vogels (38:11)

It's great advice. This was Jam-Packed. Adam, where can folks continue to follow along with you and Roadrunner and even reach out?

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Adam Hammer (38:21)

Yes, you can reach out to info at RoadrunnerStudios.com. You can also write me on LinkedIn. I'm Adam Hammer. You'll find me with Roadrunner. Feel free to drop me a note. And then we have a website. We also have a newsletter where we're talking about the businesses we're building, the partnerships we're creating, and ways that we can work with founders like those who are listening.

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Mat Vogels (38:44)

I love it. The website and the newsletter are both highly recommended. I'm a design nerd, so you guys did a great job there in the brand, but the newsletter is great as well.

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Adam Hammer (38:51)

Great.

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Awesome.

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Mat Vogels (38:55)

Adam, thank you again for being on here. I really appreciate it. I always love talking to folks like ourselves that are not necessarily in the main, know, the Bay Area or LA or New York. I think we have a unique perspective on how founders, especially those that are not in those networks can reach out. So appreciate you being on.

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Adam Hammer (39:13)

Thanks for the time. I appreciate it, Matt.

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Mat Vogels (39:15)

Have a good one.

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