The Sure Shot Entrepreneur

Founders Are Made, Not Born. You Can Learn the Craft

Episode Summary

Chris McKelvy, founder of K. Ventures and military veteran, recounts his journey from the military to tech companies like Oculus VR and Meta, culminating in establishing his own venture capital firm. Chris talks about his early involvement in JFK family's non-profit initiatives and getting inspired to start K. Ventures, focusing on the disabilities community. Chris also shares useful tips for founders on preparing for meetings with VC and encourages VCs to address societal challenges.

Episode Notes

Chris McKelvy, founder of K. Ventures and military veteran, recounts his journey from the military to tech companies like Oculus VR and Meta, culminating in establishing his own venture capital firm. Chris talks about his early involvement in JFK family's non-profit initiatives and getting inspired to start K. Ventures, focusing on the disabilities community. Chris also shares useful tips for founders on preparing for meetings with VC and encourages VCs to address societal challenges.

In this episode, you’ll learn:

[1:45] Transferring military leadership skills to tech and investing for social impact

[4:14] K. Ventures takes a unique approach to disabilities by investing seed capital in startups serving this community.

[6:22] Startup opportunities: The disabilities community is the largest underrepresented group in the world.

[9:23] It takes a lot of mentorship and support to learn the craft of being an entrepreneur.

[16:27] Feel comfortable in the way that you want to talk about your business and yourself.

[19:18] VCs are guided by their belief in the founding team's ability to lead and create something groundbreaking.

[22:35] More investors need to really think about the hard societal problems

The non-profit organizations that Chris is passionate about: Joseph P. Kennedy, Jr. Foundation, iMentor

About Chris McKelvy

Chris McKelvy is the founder and managing partner at K. Ventures. He has a diverse background spanning tech, business, non-profits, and the military. Notably, he led Oculus VR's partnerships & e-sports division, instrumental in its $2B acquisition by Facebook. Chris orchestrated multimillion-dollar partnerships with tech giants like NVIDIA, AMD, Intel, Unreal, and Ubisoft. A combat veteran with the 101st Airborne Division and graduate of Army Ranger school, he holds degrees from Harvard and Syracuse. Additionally, he served proudly as Vice Chairman of the Joseph P. Kennedy, Jr. Foundation for over eight years.

About K. Ventures

K. Ventures is a Massachusetts-based venture capital firm with a mission to catalyze the next generation of disability care. The firm invests in early-stage technology companies serving those with intellectual, developmental and learning disabilities. This includes down syndrome, autism, ADHD and dyslexia as well as other overlooked conditions. Portfolio companies include Juno, Juniper, Mightier, Finni Health, and NeuroNav.

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Episode Transcription

It's actually something America does uniquely well; this culture of entrepreneurship that get a lot of other countries (the EU for example) saying, “how do we inspire what America has going for it?” - which is this drive to not only be an entrepreneur but also this really great culture that is building in Silicon Valley is this ability to fail. The idea that failure is okay. Failure is part of the process and kind of like the Phoenix kind of ‘many times people can rise from the ashes’.

Gopi Rangan: You are listening to The Sure Shot Entrepreneur - a podcast for founders with ambitious ideas. Venture capital investors and other early believers tell you relatable, insightful, and authentic stories to help you realize your vision. Welcome to The Sure Shot Entrepreneur. I'm your host, Gopi Rangan. My guest today is Chris McKelvey. Chris is the founder and managing partner at K. Ventures.

He's had a very interesting journey through his life. He's a military veteran. He is a technologist. He was at Oculus for many years. Then more recently, he started a venture capital firm. We're going to ask him about his journey, what he looks for in startups, what kind of startups does he invest in, and how is K Ventures different from other VC firms?

Chris, welcome to The Sure Shot Entrepreneur. 

Chris McKelvy: Thanks for having me. Excited to be here. 

Gopi Rangan: Where are you from? You're from Maryland, but now you live in New York, right? Walk us through the journey, like where you grew up and how you got into venture capital and your experience with military as well. And thank you very much for your service in the military.

Chris McKelvy: I appreciate that. Thank you. 

Yeah, I was born in Potomac, Maryland. I went to college at Syracuse University. And quite quickly after that, I joined the military. I did reconnaissance and surveillance and was stationed with the 101st airborne division in right outside of Nashville, Tennessee. And I did a short deployment to Afghanistan as well, where I led intelligence teams.

That was a great period of my life. I really enjoyed being in the military. And then after that, I was recruited to join Oculus VR. It was still a startup then. And pretty quickly after I joined, we were acquired by Facebook and I was one of the first people to raise my hand and move from then Southern California up to San Francisco and to go work at the Facebook HQ.

And I worked there for about six years, leading business development teams working with our hardware and our software partners, so NVIDIA, AMD, Intel, Unity, Unreal, kind of all those big name brand folks that most VCs and entrepreneurs would recognize today. 

One of the most important parts about my story is how I got involved in disability. K ventures is a venture firm all about disabilities. We focus on that community with over 1. 3 billion people in the world. That includes the neurodiversity community. So think intellectual and developmental disabilities. We focus on mental health, the caregiving economy, elder care, as well as physical disabilities.

So that kind of broad brushstrokes of folks that we think are, have been overlooked by technology and innovation. And I came to the work through my family. My great aunt was Rosemary Kennedy. She was president Kennedy's sister and Rosemary had down syndrome. And so, because of Rosemary, my family has been building and investing in this space for over 75 years.

We've done incredible work in opening research centers. We've opened 67 research centers. We've done tremendous work in public policy. We have a huge portfolio of non profits, Special Olympics, and Best Buddies of the Best Known. I've been intimately involved in that work since I was eight years old, giving out hugs at special Olympics.

And I saw an opportunity to build something new in the space, really trying to harness the power of technology for the community. 

Gopi Rangan: I know your family has done a lot of work in this space over the past few decades. And thanks to all the service that you've brought. The topic of disability is much more openly talked about and there are a lot of services available compared to what it was a few decades ago. There's still a lot more work to do. I'm delighted that this is your main focus at K Ventures. How did you decide to start K Ventures? Why is venture capital interesting to you? 

Chris McKelvy: I ran one of our non profit when I left the military. My mother didn't want to be on the board of a nonprofit anymore. It's called the Joseph P. Kennedy Jr. Foundation. And so she decided I would take her place. The Joseph P. Kennedy Jr. Foundation is one of our foundations. It really focuses on policy for the intellectual and developmental disabilities community.

So we fund public policy fellows. I joined that board at the same time as I was out in Silicon Valley with, with Oculus and Meta. And I remember kind of these dueling narratives that I saw where for the foundation work, I would talk to families and policymakers and individuals from the community regularly.

And I just remember life was always so hard for these people. It was hard to navigate Medicaid. It was hard to find a caregiver. It was hard to get the educational supports in the school. And then I was out in Silicon Valley watching venture at that time, 2014 through 2019, the dollars were flowing to all sorts of startups.

None of them in the area that I thought of the most need. You know, lots of consumer social, lots of delivery apps. And I just felt there was this huge gap that we weren't investing in the businesses that we should be or really needed to be. That was the first light bulb that really sent us down that pathway a little bit.

And we spent a lot of time inside the foundation kind of diligence in the space and asking ourselves: what would be built here? Where are we qualified to build it? And should we build something here? We started that work in 2019, starting with the foundation.

Gopi Rangan: Now, there's a role for nonprofit organizations, charities in our society, and there is a role that founders/entrepreneurs and startups play.

They are both important. I saw early in my career, when I was an intern at a for profit social impact venture capital firm, the power of entrepreneurship. It creates sustainable, long term, economic development in different communities; solves problems for neglected and underserved population. And I see that you've taken that power to unleash into the world of disability and special needs in those areas.

What stage do you invest in? I know we are co-investors in Juno and we are to find more opportunities like that. Yes. What stage do you typically invest in? 

Chris McKelvy: We're typically seed investors, but we've also done a good handful of series A. Not big on the pre-seed. So, really focused at seed mainly. 

Gopi Rangan: Okay. How many companies do you invest in roughly per year? 

Chris McKelvy: About six per year is the pace we've set for our first fund. And I think that feels right given the fact that we have two venture partners. John Olenoff is my business partner, and so I think that is the right pace for us.

Gopi Rangan: The topic that you've picked is quite broad. It feels like a niche if you're a very large firm looking at everything, but the area you've picked is very broad. Are there certain themes that you're excited about within disability and neurodiversity in those topics? Thanks. 

Chris McKelvy: Well, thank you for that. I think we think so too. When people first hear disability, I do think most people knee jerk to a small niche subset. But you're exactly right. It is the largest underrepresented group in the world. And I think not only is there a huge group of people with a disability, but then even more family members caring for supporting and involved in those people's lives.

So it really is a broad community. Themes we're excited about. We are excited about, I think there's a ton we're excited about. I think we're really excited about the caregiving economy broadly. We haven't really made a strong investment there, but we think one, there's just tremendous amount of need.

The idea that the millennial generation, which I'm a member of, are you Gopi? Are you a millennial or are you a Gen X? I'm Gen X. You're Gen X. That's all right. We won't hold it against you. Many millennials, you know, we're being called the sandwich generation, right? We're going to be caring for our children.

We're going to be caring for our adults. The cost of caregiving continues to balloon. And so, we feel technology has a really important role to play there, both to improve outcomes and drive down costs. 

We continue to spend a ton of time in behavioral health. So, you know, autism and ABA care. We think there's real opportunity there to, again, really revolutionize what's happening there. We just did a recent investment into a company called Finni that we're really excited about.

Something I'm also passionate about is digital therapeutics, you know, games as medicine. We've made one investment there in a company called Mightier, but I think the floodgates there are getting ready to burst open and we will start to see video games enter the doctor's office and be used as medicine in a very real way, very soon.

Gopi Rangan: I see your focus areas, priorities are caregiver matching, finding caregivers at home or elsewhere. ABA care, autism, those are topics that are exciting to you. And it's very interesting to hear how video games are going to disrupt how physicians provide service to patients. You mentioned a few examples already.

Can you give an example of one of these companies? How did you meet the founder? What happened in that meeting, especially the first and the second meeting? What questions did you ask them? What got you excited? 

Chris McKelvy: I'll use our first investment, a company called Juniper. Juniper connects behavioral health providers really with a focus on on ABA today to their insurance payers and really looks to streamline that process for providers and payers to help them increase their receivables, get more visibility into the amount of receivables they will get and actually reduce day sales outstanding. And in the behavioral health care market where supply is limited, demand far outweighs it. There are wait lists that are long. There are deserts where kids and families can't get care at all. This is a big deal. Being able to provide that visibility to receivables and speed allows these clinics to get on the front foot to expand, focus more on providing care and less time on the admin.

So we're really excited about Juniper and the work they're doing. We found them coming out of Y Combinator, which is one place we always kind of keep our eyes on. You know, I really do believe that founders are made, they're not born. And I do think there are some great founder factories, especially in the US, Y Combinator being probably one of the best.

And so we spotted them coming out of Y Combinator and got time with them. And I think what is most striking about Christophe, who is the CEO there, it's just his mastery of not just the industry he's in, but the business he's building. And he has such expertise and confidence, and yet he is able to communicate that in a way that I think any investor can follow along.

And we've just kind of been blown away by him every time we spend time with him. 

Gopi Rangan: You mentioned something that's quite interesting. Founders are made, not born. Elaborate on that. What do you mean by that? 

Chris McKelvy: Well, I think some people have the impression that when you come out, you're just an entrepreneur and some entrepreneurs are very talented and those ones that cream rises to the top. And I don't agree with that. I think for many entrepreneurs, there is something inside them that pushes them to want to be an entrepreneur, to want to start a company and build something. It takes a lot of mentorship and support and crafting of the trade of being an entrepreneur. And so I think there are places that do that much better than others, whether it's through actual skill building or through culture building.

I remember I watched a talk from Mar Hershenson at Pear VC and she talks about stanford and how Stanford is such a great institution that creates such great entrepreneurs. She highlights that one of the reasons they make great entrepreneurs is because founders there look at prior founders like Evan Spiegel who went on to, you know, found multi billion dollar Snapchat.

And so those founders start thinking I should be a multi billion dollar founder. I shouldn't take the exit at 50 million or a hundred million because I can also build something large and impactful and meaningful. So there's this culture at Stanford that kind of breeds great ambitious founders that it's hard to replicate other places.

Gopi Rangan: I've always believed that all of us have a spark of entrepreneurship in us and some of us keep it alive and as careers and life journey takes us in different directions and that spark lights up later when timing works well. When we take the approach that, "oh, entrepreneurship is not for me, it's for someone else and I don't have that kind of skill set or I wasn't born with it", then we don't have the responsibility to build things, create things.

And I think that's a flawed approach. The spirit of entrepreneurship exists everywhere. In all of us. The right opportunities, the right investors, the right ecosystem, a lot of early believers coming in, you know, starting with employees and customers and others, that initial recipe creates the possibility for long term success.

And I agree with you that when you see others who have done it and they are massively successful, they've created billion dollars of value in the market. You also get inspired that I want to do that. 

Chris McKelvy: It's actually something America does uniquely well - this culture of entrepreneurship. And I, I think it gets a lot of other countries, you know, the EU looking over here and saying, how do we inspire this, what America has going for it, which is this drive to not only be an entrepreneur, but I think also this really great culture that building in Silicon Valley is this ability to fail. The idea that failure is okay. Failure is part of the process and kind of like the Phoenix kind of many times people can rise from the ashes. And when I talk to friends, I had the gift of going to grad school at Harvard for a year and got a lot of international friends and a lot of them have commented that that is something that does not exist, especially in many Asian cultures.

The idea that failure is unacceptable and not something that is really tolerated. And so then you don't get individuals who want to take risk. And I think that's something fantastic and beautiful that we've built here in America. 

Gopi Rangan: It's baked into the American dream. 

Chris McKelvy: A hundred percent. 

Gopi Rangan: What's your advice to founders? Building a startup is already hard. I know we have already kind of talked about how amazing it is when it's successful, but failure is quite common in this world. It's very hard to build a startup. What advice would you give to founders, especially when they focus on this sector, disability focus? What are things that they need to prepare for? 

Chris McKelvy: It's hard. I think also founders sometimes forget that us as venture capitalists are founders as well. Right? I mean, we're trying to build our own businesses, Gopi. So I can relate. I am empathetic to how hard building a business is. 

What advice would I give to founders? I think there's a real craft to being a founder. And I think you can consistently work on honing and studying that craft. And there's never been more content or information out there about how to be a successful founder and how to grow a successful business. And by no means, am I recommending just go on Twitter and follow what everyone says. But I do think there are materials out there.

And if this is a mission that you want to pursue, you know, just like if I wanted to go be a, great trader, I would go read books about being a great trader. And so I think there's that similar thing exists for founders. There is ability to hone your craft and being a manager and how you build a team and how you fundraise. The information is out there.

So I would encourage founders to seek it out. I would also encourage founders to really seek out mentors, which is something that I've tried deliberately in my life with varying degrees of success. But I think you want to have mentors that you can call and say, can you chat for 10 minutes on a random Wednesday night?

And just let me run this thing by you. And maybe they're your investors. Maybe they're not, but I think trying to build that support network is just so critical because it is going to be really hard. 

Gopi Rangan: It is hard. I'm curious about the first meeting and the second meeting when founders talk to you in addition to this advice, what can they do to be productive in that meeting?

Chris McKelvy: Bring your authentic self to that meeting. You can manifest that in a few ways. Some founders start the meeting by asking me, " do you want me to pitch with slides or do you want to have a conversation?" And usually my answer is "whatever you want to do." I'm fine to ingest the information in any way possible, but I think making sure that you are feeling comfortable in the way that you want to talk about your business and yourself.

That would be kind of my first suggestion. So, bring that authentic self to the meeting. I would say also 'practice makes perfect' when you're kind of out there and you're pitching. There's a great book by Ryan Breslow, who is the former founder of Bolt and think what you will about him, but he's raised a lot of money and he writes this really easy to read book about fundraising and how you should think about your fundraising process and who you should prioritize and how many meetings per day and your fundraising process and you know, the TLDR there is smaller funds and those that you're not that worried about losing, you know, they go earlier in the fundraising process. Andreessen Horowitz (a16z) should probably be Friday at 10 AM, the third or fourth week of pitching. When you've really polished and you've honed and you've gotten the feedback and you've gotten the reps in. 

So I think when it comes to fundraising, I would try and be as deliberate about it as possible. We're not all going to be Ryan Breslow. We're not all going to time box our fundraising in a one month sprint. But I think you want to be really thoughtful about how you go about it and try and continue to improve over time. 

Gopi Rangan: I usually tell founders that choose investors for whom you are an important investment. Check size and various other things, whether they are a celebrity or not, or whether they've had successes in their investments in the past - all of those things are secondary.

The most important thing is, if you're an important investment for them, then they'll make time for you as a founder. It's good to see that the way you describe it, it's in a slightly different way, but talk to the smaller funds first and rehearse your pitch. And then when your pitch is fully polished and ready, take it to Anderson Horowitz and other large firms.

By design, they get the larger firms don't get to see the opportunities first, which is natural. The founders also want to be well rehearsed. So the more successful you are as a VC, you're farther removed from the first steps in the fundraising process, which is a very interesting. 

Chris McKelvy: And I think maybe some insight from our perspective. For us to be able to call our contacts at Andreessen Horowitz or General Catalyst and say, you got to look at this company and this founder, that's good for us. That's good for our business. And so, you know, we want to be the one who found you before they did. And so that's another kind of reason to call Gopi and I before you call Mark Andreessen.

Gopi Rangan: What's your most common reason to say no? I imagine that you meet a lot of startups and you only invest in six companies per year, but you say a lot of no. 

Chris McKelvy: We do, which is not the best part of the job, I'll be honest. You know, I think Judd Olanoff and I both have this great gift where we've gotten the opportunity to work at really high performing organizations.

I spent time in the military and at Meta, you know, I believe that the military is one of the greatest institutions for building leadership capabilities. They really do it well and they do it at scale. Judd spent time at JP Morgan, another fantastic, highly regarded institution. And so I think at a basic level, what we try and do is imagine these founders where they're going to be, which is not so much about a hundred million dollars in revenue.

It's about leading teams of hundreds of people and maybe thousands. And so I've seen firsthand what those individuals look like and what characteristics they have. And I think I have an ability that I will continue to approve over time to be able to squint and say, "are they going to be able to command a room of many hundreds of employees and lead them through the fire?"

And so when I, we say no. And for the record, there's a million reasons venture capitalists say, no, it's not the right timing. It's not the right fit. We made a competitive investment where, you know, the deployment cycle isn't right. The evaluation is too high. There's a million reasons to say no, but I think beyond those, that's one of them is we kind of say, "do we believe that this person can lead this company be something very large, very impactful?"

And sometimes we don't. And a lot of the times I think we're probably wrong about that. 

Gopi Rangan: This is a beautiful description. I want to emphasize on this. There are a million reasons to say no. The standard things, " I don't believe in your market size, or unit economics doesn't work, or your team doesn't have this expertise that's required in the founding team or the early team."

Like, various reasons like that. But when you get past all of that, and everything checks, You have to still have the conviction that this founding team can create something huge. Yes. They can lead a large group of people to believe in something well before everybody else in the world sees it and the story becomes successful.

In those early days, how do you assess the quality of the founder and that changes from VC to VC. Now, just because you say no, or I say no, we don't have the conviction, but some other VC might have the conviction. And like you said, we're often wrong when we make these judgments, that's a very interesting way to look at it. And hearing your story will make it easy for founders to understand who you are so they can connect with you. 

Chris McKelvy: And to make it easy for founders, maybe, one question Judd and I ask ourselves a lot is: would we go work for this person? Which isn't actually the craziest thing, right? There's plenty of big VC firms where junior associates leave the company and go work at that company, right?

And so that can be a good litmus test and maybe a good way that founders can come into these conversations. You know, I'm not just convincing this person to give me money. In a very real way, you're convincing me to work with you for the next 10 years. And you really want me to say, you know what, this K Ventures thing, I'd rather go, you know, join this, this founder, who's going to build the next Amazon.

Cause the opportunity there is, is much more than I could do at K Ventures. 

Gopi Rangan: You've started K Ventures and it's off the ground and you're building the firm. As a person who's come into the venture capital ecosystem newly, what change would you like to see in this industry to make it better for founders, for VCs, and then everybody else who are players in the ecosystem?

Chris McKelvy: I think I would double click on where I started maybe this conversation, which is I would encourage my fellow investors to really think about the hard problems that we want to solve in this world and in this country. We have this great privilege and gift to have capital and to really be able to speak with it in a very real way.

And I would encourage my fellow investors to take that responsibility really seriously, which I think we all do, but there's a responsibility there to really kind of want to build the change you want to see in the world. And so to make sure that we're putting the capital and our resources and our effort and our enthusiasm towards fixing the large intractable problems that this country faces, which I think technology, I'm a techno optimist, all venture investors are techno optimists.

We have to be. And so I think when we think about health equity and education equity and homelessness and immigration and safety in our communities, I mean, these are massive, massive, massive problems. But I believe that technology has a very real role to play in it. And I would encourage my fellow investors to really think hard about that.

Gopi Rangan: That's an inspiring message. I see that you are encouraging people to take on the hard problems. Don't just build technology for technology's sake, but see how it has an impact in the real world, in the society, on people's lives and take on those problems. There are so many of them available for people to focus on, and you're encouraging investors to do that.

And I agree with you that the industry as a whole has done quite a bit of that but not every investor is willing to take on the hard problems. They would rather build on the momentum of other investors and look for signals from elsewhere instead of having independent opinions. It's a very inspiring message.

We're coming towards the end of our conversation and I want to ask you about your community involvement. Now, I usually ask all my guests and I think in your case, your family and the legacy that you're building is all involved in community activities in various forms.

Is there one nonprofit organization you can talk about that you're passionate about? 

Chris McKelvy: Well, I'll give you two. I mean, I led the Joseph P. Kennedy Jr. Foundation for many years, and we do incredible work. We fund public policy fellows. The origin story of the foundation started with Rosemary, but when Senator Kennedy was passing the Americans with Disabilities Act, he noticed this lack of expertise on Capitol Hill on disability policy.

And so the foundation's been actively trying to fill that gap for about 35 years of funding, the next generation of public policy fellows. And so my call to action there is if you know anyone who would fit that bill, I would love for them to apply. We fund fellows every year. 

Away from my family, I do a program called iMentor. It's a mentorship program for kids in high school, generally from underprivileged high schools. And they pair college grads with, with high school students. Starting at the junior level, you work with them for two years to get them to apply to college in many sense, many times they're first generation college student.

So really trying to educate them on the process of applying to college. Getting financial aid, going to college and then walking them through and holding their hand through that first year. I've done it twice now. So I have two mentees and I think it's been incredibly rewarding and inspiring work in many ways.

It's so cliche, but I've learned more from them than they've learned from me about resilience and hard work. I f you're in New York city, we're always looking for more mentors, especially male mentors. I will say that the male demographic is lower on volunteering. So we'd be thrilled to have more mentors join us. 

Gopi Rangan: Chris, thank you very much for spending time with me. Thank you for sharing examples from your own life and your vision for the future and how inspiring it is to see that you're focusing on something specific that your family has devoted to for decades.

I'm delighted to see that you're amplifying that impact through entrepreneurship. Thank you for sharing your nuggets of wisdom and I look forward to sharing them with the world. 

Chris McKelvy: Thanks, Gopi. 

Gopi Rangan: Thank you for listening to The Sure Shot Entrepreneur. I hope you enjoyed listening to real-life stories about early believers supporting ambitious entrepreneurs.

Please subscribe to the podcast and post a review. Your comments will help other entrepreneurs find this podcast. I look forward to catching you at the next episode.