By Semil Shah

Two years ago, Kent Goldman, a former partner with First Round Capital, took the wraps off his own seed-stage venture firm and the novel idea that it incorporates. Specifically, Goldman said that his new firm, Upside Partnership, would give every founding team that it backs a piece of its own carry, effectively making them Upside’s partners.

Investors liked the idea, committing $30 million to Goldman’s debut fund, and committing another $44 million to his second fund, which closed earlier this year. We caught up with him recently to talk about the current, seed-stage ecosystem. More from that chat below.

In the consumer tech landscape today, what are some consumer behaviors you’re tracking that could lead to new products, services or networks?

It’s been a pretty long time since I’ve taken a thematic approach to investing. I try to be proactive about people rather than ideas. Founders are much better at seeing the future than investors, so my focus is really on finding people who’ve been thinking about and working through solutions far longer than I’ve even known a problem exists.

I have gotten wrapped around the conversational UI axle. Some of Upside’s earliest investments were behind founders building companies around text-based conversational UIs. With the attention now being paid to voice interfaces, it’s been difficult not to revisit the idea of a disappearing UI and the challenges they present to our collective learning around visual interfaces. For example, we’re used to having app icons to remind people about the existence of apps they’ve already downloaded. We’re used to visual design being used as a method to introduce new features. But how do you remind a user of skill they added to their Amazon Echo? What’s the audio equivalent of an app tutorial? How do you train a user to a specific conversational app syntax? What’s the audio corollary of a badge count? It’s been fun to kick around these questions with folks.

With one fund of Upside Partnership under your belt, what’s been the single-most surprising element of running the fund?

The biggest surprise is that we’ve been the first institutional investor to commit to funding a founding team in the majority of our investments. Our typical initial investment is very deliberately around $300,000. Because Upside was formed with the intention of playing well with other investors, I thought it was more likely that we would be tucked into a round after a lead was chosen. More often than not, it’s been the opposite. It’s been a gratifying development.

Another surprise was that four of our first eight investments backed female founders.

How do you anticipate seed syndicates changing as more investors enter the mix and smaller funds begin to scale? 

It’s going to get a bit edgy in syndicate land. When I joined First Round, back in “super angel” days of 2008, I saw how much support founders could get when their investor syndicates were working in alignment with one another. But as the seed landscape evolved, becoming the lead investor or hitting arbitrary ownership targets became increasingly important to a number of funds.

At some point investors decide whether they believe special founders drive outsized returns or concentrated ownership does. I strongly believe it’s the former, so I decided to build a fund that would be focused on overachieving as a syndicate member. This means investing time to help regardless of your check size. And it means there is a bit more freedom to support the founders you want to work with. One way to do this well is to keep fund sizes small.

As many emerging funds make the decision to grow their size and set a goal to lead rounds, they’re going to discover that it’s much more challenging to directly compete with elite firms like First Round than it is to work alongside them. In doing so, they’re making the decision to put their access to great founders in jeopardy. It’s always been a puzzling strategic choice to me; do they want to scale fund size or do they want to scale returns?

Many of your seed deals have gone on to raised Series A rounds. How does the nature of your work with companies change after that Series A closes?

I’m most engaged with founders at the seed stage. The challenges they face are the ones I best understand. As their companies scale beyond into Series B territory, the decisions they face fall outside of my focus. By this point, I hope to have earned enough of their confidence that they will still consider me a trusted counsel – it’s the way I hope to earn the opportunity to make follow-on investments in their businesses. But, as companies age, I anticipate becoming more reactive, rather than proactive.

In the context of early-stage investing, what’s something that you believe that isn’t necessarily a popularly held point of view?

Investors stand on the shoulders of founders. And often founders, not investors, give other founders the best operational advice. It’s why we make each founder we back a partner in our fund. Venture firm’s brands are built on the smarts and fortitude of the people they back. It’s wise to recognize this with more than hollow lip service.