Ask Me Anything: Charlie O'Donnell of Brooklyn Bridge Ventures

Charlie O'Donnell is the sole Partner and Founder at Brooklyn Bridge Ventures.  The fund makes seed and pre-seed investments and was the first venture firm located in Brooklyn. He has sourced investments in Singleplatform (sold to Constant Contact), Moat (Sold to Oracle) and GroupMe (sold to Skype) and Refinery29. Charlie’s answers have been slightly edited for concision and clarity. Watch the full conversation here. 

What’s your invesment thesis?

There’s basically two kinds of investors: opportunistic and thematic. 

So there’s some people who say look I'm the world’s leading expert on AI and I have a strategic advantage and network when it comes to doing stuff in the AI space. And other people (which is the camp I fall in), if somebody smart comes along and convinces me that they have something in an interesting space, I'll take a look at it regardless of space. 

I think that stage is where people stay most consistent. So while I am a generalist in the sense that I don't follow a particular sector, given the stage I invest in, when it’s two people and a prototype or three people and three customers or what have you, most of those companies are going through the same things: who are we going to hire, how are we not going to run out of money, where do we spend our limited marketing dollars and get the best ROI, what’s the best next round investor going to ask of us, and those things are really consistent across the board. The way I think about it is I leave it to the founders to be the expert on their space, and maybe I think about this a little differently, and maybe it’s a little riskier, but you have to think about what you believe is risk and where you’re taking them. 

There are 3 types of founders. 

The first division of founders is those that are smart and not smart. There are some people that really impress you and other people that are like, “I don’t know if I want to back this person.” That’s the easiest way to tell the difference. In the smart category, because we are only backing smart founders, there’s people who have done their homework, and done enough homework, and people that haven’t. 

That’s the more tricky division because there are some people who are really smart and present super well, but they have an idea and they really haven’t kicked the tires on it yet. They really haven't done nearly as much work and sometimes it’s because it sounds like a great idea and they have a great network of people and they are able to raise a friends and family round or an angel round or something without people making them go through all the necessary work involved and really make sure they have something. 

So if I feel like a founder has really done their homework and has gone through all those necessary steps, I’m inclined to trust the founder’s view of an industry, because I tend to think that rational, smart people would not want to be stuck in a bad idea. So if you’ve been doing nothing but spending the last 6-12 months talking to everyone in the space and clearly iterating an idea, I’m inclined to believe that the conversations they’ve had with those customers are legitimate. 

If I trust they’ve had those conversations, I don't try to do-over those conversations in a really small amount of time. It very much frustrates me when you go pitch an investor and someone’s been working on something for a year and they’re clearly knee deep in it, they run a newsletter on the space with 10,000 people on it, and you’ve got this VC who’s googling around for potential competitors and doing this very cursory search. If you trust that the entrepreneur’s gotten past that point, you’re at the point where you need to be able to take a risk on this person. 

So I'm more of an early stage generalist and I'm focused geographically. As a solo GP, I'm in a very big market, and New York is not particularly competitive when it comes to VC investments. There’s plenty for me to do here, I get into nearly all of the deals I try to get into, it’s more than enough for me to look at. It’s an ecosystem that I'm focused on. 

I’m not a social impact fund, but I see a theme where some of the best quality people want to make a positive impact on the world. 

Won’t knock on anyone doing ad-tech, but it’s a space that i’m not as excited to be in anymore. There’s a lot of people who are, especially after the last four years, who are focused on “How do I make this world a better place?” So they’re focused on access, health, quality products, sustainability, all that sort of stuff.

 One of the companies I've backed is enabling people that are in debt to take more agency in negotiating their debt rather than being preyed upon by debt consolidators and negotiators and all that kind of stuff to be able to help themselves out of that problem. Clearly that’s a huge, huge problem. It’s a fintech founder that isn’t just looking to help investment banks make more money, but is taking that from a more individual centric point of view. 

So it’s funny that some of these investors will look at the deals I’ve done in these funds and say, “Is this a social impact fund?” And no, I’m here to make money, but some of the best people I’ve run into are looking to make money in positive ways, ways that you can feel proud to be an investor in the company.