As many student entrepreneurs in the TIA Incubator are learning, every business needs seed funding to be successful. One of the most prominent avenues for scalable, high-growth startups is venture capital.
Gus Coldebella ’91 is an experienced venture capital partner, chief legal officer, general counsel, and former government official. He currently serves as chief legal officer at Castle Island Ventures. He was previously a partner at True Ventures — a venture capital firm specializing in supporting early-stage technology startups — and still serves as a special adviser at True.
Role of venture capital in startup growth
“Venture capital is the fuel that drives innovation in the United States, and it is one of the things that distinguishes our entrepreneurial culture from that of many other countries around the world,” said Coldebella.
Venture capitalists invest in an idea that may seem far-fetched, abstract, or high-risk. Where the cautious investor sees a money pit, venture capitalists see opportunity. The foundation of venture capital is strategically maximizing risk, contrasting the traditional “risk-avoidance” approach.
“Most investments a VC fund makes will not be the next Meta, Google, or OpenAI, but one or two of them will be monumentally successful,” asserted Coldebella, as well as suggesting students read “The Power Law” by Sebastian Mallaby to learn more about venture capital theory.
Coldebella believes that the best VCs follow a “founder-first” philosophy that emphasizes nurturing a supportive relationship and open communication between a venture capitalist and entrepreneur. “A VC’s ‘product’ is maximizing the success of the founders we invest in,” added Coldebella. “We want a founder to call not just when things are going right, but when — especially when — things are going a bit sideways.”
True has invested in many well-known companies, such as Handshake, Peloton, Blue Bottle Coffee, Fitbit, and Ring.
Opportunities for students to gain experience
Students can gain direct insights and experience through internships and fellowships at venture capital firms. For example, every year True Ventures to students who are interested in learning more about both venture-backed startups and venture capital firms. ԱƵ’s Career Services (Handshake portal) and the Office of National Fellowships and Scholarships share fellowship and career opportunities. These provide students with a hands-on experience at the center of portfolio companies alongside venture capitalists.
“True’s fellows get to work in the trenches at one of our portfolio companies, learning how venture-backed companies actually operate,” explained Coldebella. “It’s an amazing way for someone interested in entrepreneurship to spend the summer.”
Venture capital gives ambitious entrepreneurs not only seed funding to catalyze business growth, but also the possibility for lifelong mentors and an expanded network. But as with any funding source, it is important for startups to understand the full parameters of venture capital.