7BC Venture Capital

Andrew Romans is a top decile VC investor with over 100 investments. He is a 4x author published in five languages and a former professor of venture capital at Chapman University. Romans host the podcast "Fireside with a VC." His advice to founders and VCs is to spend 30 percent of their time helping others, which boosts effectiveness by 1.4x. By age 28, he had raised over $48M for his startups. With a vast global network of LPs and corporate connections, he has a strong VC track record and extensive experience as a founder, CEO, and advisor on innovation economies.

A Venture Capital Odyssey

My professional journey began in enterprise software during the 1990s, eventually founding multiple startups that collectively rose over $300 million in venture capital. This experience helped me gain significant expertise in securing funding, and I learned valuable lessons from both successes, like an IPO on Nasdaq and a merger and acquisition, as well as failures.

I founded Georgetown Venture Partners, a boutique investment bank focused on assisting startups in securing venture capital, and dedicated a decade to this mission. Later, I created the Founder's Club, a venture capital equity exchange fund. This initiative allowed founders of venture-backed companies to exchange up to ten percent of their ownership for limited partnership units in a fund that invested in 25 startups. This arrangement fostered a collaborative environment where founders actively supported each other's success.

  ​Our primary interest lies in businesses that automate human workflows and utilize data, essentially encompassing AI technologies. We focus on software companies that integrate APIs with data sets, enabling them to make data-driven decisions through automation.   

As the secondary market for founder stock evolved, it became acceptable for founders to sell shares directly, which shifted my focus away from the Founder's Club model. I transitioned into brokering these secondary sales, becoming an expert in helping founders sell their equity to interested investors.

Currently, I run a venture capital fund that distinguishes by offering professional fundraising assistance to our portfolio companies at no extra cost. We help these startups secure their next funding rounds after investing in them, and we specialize in selling portions of our ownership on the secondary market. This approach enables us to provide quicker returns to our investors, as we can sell shares for liquidity shortly after the startups achieve higher valuations.

Targeting the Right Startups

We typically look for startups with monthly recurring revenues between $100,000 and $500,000. Our primary interest lies in businesses that automate human workflows and use data, which essentially encompasses AI technologies. We focus on software companies that integrate APIs with data sets, enabling them to make data-driven decisions through automation.

This approach allows these companies to perform tasks traditionally handled by one or more humans at a lower cost. By automating the roles of many, they can provide solutions that were previously not economically viable. We are particularly excited about companies that can automate the work of thousands of people, as this creates substantial value for customers. While we prioritize strong investments in the U.S. and Canada, our current focus is less on emerging markets.

The Value of Investor Engagement

We raise capital from individual high-net-worth investors, including single families and family-owned conglomerates worldwide. These diverse sources provide the funds we invest in startups. When these investments are made, we facilitate connections between our limited partner (LP) investors and the startups. Often, LPs contribute additional value by assisting in various ways, like sourcing investments, conducting due diligence and making staffing or customer introductions.

I believe that the effectiveness of a VC fund manager is limited by their available time. By leveraging the extensive network of our LPs and fostering communication between them and the startups, we can significantly enhance the support and resources available to the companies we invest in.

Investing Beyond Capital

I strongly believe that doing favors for others is one of the fastest ways to accelerate your career and achieve success. For instance, I hired May Ron Shark, who was an outstanding student in my venture capital class at Chapman University. I encouraged him to focus on sourcing startups or fundraising and on building connections by doing favors for everyone he meets.

At networking events, even if a contact doesn’t align with the investment criteria, it’s important to engage with them, listen attentively, and offer assistance. This approach can lead to unexpected connections; for instance, after conversing with one person, he might encounter someone else who could benefit from that initial discussion. By consistently helping others, he can quickly build a positive reputation and, over time, become quite influential.