Creandum’s Carl Fritjofsson on how VCs can make remote-first meetings an advantage.

“The venture world defaulted historically to physical proximity, which is why Silicon Valley exists,” says Carl Fritjofsson, a Partner at early-stage venture capital fund Creandum. “At a temporary lack of physical proximity, we’re seeing some changes in communication strategies that have some interesting implications.”“The relationship has always been at the core of any venture fund,” comments Carl. “Now, we’re moving into this artificial period where there is no physical relationship anymore. VCs and founders have to build relationships digitally and remotely.”Although based in San Francisco, Carl isn’t your typical San Francisco VC– he’s the boots on the ground for the very successful Stockholm-based Creandum VC fund. Since Creandum largely focuses on European companies, Carl is no stranger to working well outside of the PST timezone, transatlantic flights, and remote calls.This unique position taught Carl how to maximize the value of his meetings with entrepreneurs in remote settings, a valuable skill in 2020.Lately, Carl has taken his approach to remote conversations with entrepreneurs a step further and believes venture capitalists can re-energize and maximize their remote meetings with a few minor adjustments.

“My remote strategy wasn’t built on some predetermined strategic goal, and is more the result of figuring out what works,” comments Carl. “We had to find a new playbook for these interactions.” 

Carl sat down with Collin West and Nihar Neelakanti to discuss.

Can you describe how Creandum typically goes about meeting and communicating with founders?

Most of the time, Creandum leads or co-leads the deals, which means it’s more of a high-conviction low-frequency model. Within every company Creandum invests in, we expect to spend a significant amount of time with the founding teams. We really want to understand whether or not this is the right company to bet on in terms of its potential and growth, momentum, and founder chemistry– this is a 10 year journey so both parties need to be certain there’s a good match .In a physical world, we try to pull these individuals out of their office environments and out of the professional context where they spend most of their time. We aim to pull the curtains around them as individuals to get a better understanding, and in the process, they get a similar viewpoint of us.So, this means things like going out of dinners and other activities, sometimes even going and working out with some people. Whatever is appropriate to get to know these people. These are things that generally take quite a bit of time and are dependent on being in the same place, right?If you go out for dinner with someone on these terms, you can probably expect around a three-hour commitment for the nightSo, how do we transition that experience into kind of a remote-first environment where we're not meeting these people in person? How do we still keep the energy, momentum, and intimacy that comes naturally in physical world interactions?We really want to get to know these people. We want them to really get to know us. So what can we do? Scheduling a three-hour Zoom meeting is pretty difficult, right?

How have things changed for you?

The first thing that we have to do in a remote-first environment is to adjust our expectations. You can't eat the elephant in one go– you have to kind of split it up into smaller pieces and find many more touchpoints. And that probably means we're extending the time period of how quickly we get to the same depth in the relationship.It takes more days if we can't do it in person, but it is possible to do so.Another element that helps is taking care of the stuff that doesn’t require any physical proximity to the company at all, like looking at data, market size, and so on. A data analysis can be done from anywhere. If you traditionally do this in-person with the company, you can probably be more efficient in a remote environment since you don’t have to travel to get this done. This gives you the opportunity to make the touchpoints you do have more meaningful in regards to building a human relationship and trust.The more interpersonal stuff, like understanding a founder’s professional trajectory, can be learned from phone calls and by triangulating input from other people.This is still fairly easy to do without having the physical proximity to the founders. That’s something we can do from a desktop.And then, you have the relationship-building component with a founder. In situations where I would typically go in and spend a lot of time with the founders, I now have to find a way to do that digitally.It’s not rocket science and I don’t want to give myself too much credit, but I’ve found you can accomplish this or something similar with minor tweaks.For example, I try to get into a personal texting relationship with a founder very early on in the journey. This helps you break through the professional walls and move the conversation beyond the box of scheduled meetings and emails.It helps you build a closer relationship with that individual– you can ping people randomly like Hey, how was your weekend? Creating these minor and more frequent touchpoints that don’t require a pre-scheduled meetings is important in facilitating the growth of that relationship and build trust.This also helps the founders get to know us more. We can now communicate on a more casual basis and a higher frequency basis.

How do you go about remote calls with founders?

A big component is trying to replicate activities like going out to dinner and talking about life. The key here is framing video calls with a sole purpose that is more informal and casual. I’m saying things like:“Hey, I would love to just sit down with you and talk about your life. The way I would have done this before COVID is that I would have flown to wherever you are and ee'd have gone out for dinner and hung out. We'd talk about your family history and what your goals in life are outside of this job. And I'll tell you my story. But since we can't do that now, let's find time to do it over zoom.” I feel it helps to be very upfront in framing the situation to get that mental buy-in from the founders. If you both have a mutual understanding of, “hey, this can be a weird and limiting time, but it doesn’t have to be unproductive in building a relationship,” you’re already operating from similar ground.I’ve even used the tactic of bringing a glass of wine into these conversations to remind the founder this is a casual conversation. It doesn’t matter if you have water in your wine glass, but I’ve found it helps move the conversation away from a typical Zoom meeting atmosphere into something more casual, like friends catching up.You want to make sure that there is a fairly wide range of time available for these calls because it might be tough to get into the substance of things or anywhere meaningful in a remote call in under 30 minutes or so on a lunch break. I usually try to schedule 90 minutes for these, which is still a fairly large amount of time, so you need to be transparent in communicating they why ahead of time.

How do these meetings generally play out?

I usually start with talking about myself to lead with example of what type of things I hope to share and learn from them. There are no right or wrong answers. In these calls, I stay away from hard questions and focus more on open-ended dialogue. We want to get to an understanding of who we are as individualsI start with telling the founder about my life story, who I am, why I came to this part of the world, my history, what drives me, the formative events in my life that I believe explains who I am today, what I want in the future, and so on – it’s actually inspired by the lifeline exercise we do at Kauffman Fellows in the first module.

What have you found to be difficult to navigate?

A few things are tricky to get around in remote-environments.For example, understanding team dynamics on companies with multiple founders or key employees. You can’t really absorb this until you see teams in action. I found it’s useful to ask questions about how individuals on the team operate, how they do so in comparison to their co-founders, what separates them from other members on their team, what makes them a good team, and so on.In lieu of seeing the team working together, you can get some insights from triangulating the responses from this across the various key team members and see if the overall story is cohesive. Do the co-founders think of each other the same way they think about themselves?

Final Thoughts

Ultimately, Carl feels he is able to get more value out of his meetings with founders; even if the webcam has become the temporary standard.“The reception from founders when I schedule a dedicated session to talk about life has been very welcomed and appreciated,” comments Carl. “And all in all, this helps me understand the company better while also build trust in the relationship on both sides. This trust and human connection is, what I think, the primary determining factor of who wins the deal versus not.”In a post-COVID world, the pendulum will likely swing back towards physical meetings, but firms capable of adapting and using remote processes will likely have a much stronger approach to building relationships faster and wider.“I’m certain that more firms will start investing outside of their own geographical proximity as they become more comfortable with remote processes, which ultimately will only open up the market and distribute venture investments to more places across the globe - something we all should appreciate.”