In August of 2016, John Fein started the process of raising a venture capital fund in Kansas City.  He had a target of $7 million as his fund size and as he describes – “zero connections” to the high net worth community in Kansas City.

However, he had a mission to raise and invest the fund in the under-served Greater Midwest.  It took him nearly eighteen months to build his $18 million seed fund.  This fund has invested in twenty-five companies so far, the vast majority of them located in their Greater Midwest region.

He described his approach to finding deals as “being very deliberate about relationships.  I don’t want Firebrand to be transactional.”  This led him to create relationships with entrepreneurs, such as Ben Milne (Dwolla) and Nick Bowden (Replica), well before there was an investment opportunity for himself or Firebrand.  In both instances, Fein describes the process of building the relationship – not as a mechanism to finding a deal – but as a process of finding out more and understanding the person behind the companies in which his firm invests.

As an example, Fein described his discovery and conversations with Ben Milne.  Fein describes meeting Milne in 2012 and hitting it off.  Over the years, he and Milne would exchange emails and texts discussing what they were up to.  During this time, Fein moved to a role running the Techstars program in Kansas City, and eventually to Firebrand.  This led to an exchange where Milne contacted Fein and said, “I want to talk to you about something.”

According to Fein, Milne approached Firebrand to help the company rediscover its Midwest roots.  After taking money from the coasts and receiving the coastal pressure to look and feel like a coastal company, Milne was attempting to move the company closer to its Iowa roots.  He wanted to know if Firebrand which is focused in the middle part of the country wanted to be part of that.

This type of deal does not usually approach a small Midwestern VC firm, but it is this type of deal that explains why relationships are so important to Fein. He was not looking to do a deal with Milne.  He was looking to help Dwolla, an Iowa based fintech company, succeed.  And frankly, it is hard not to listen to Fein and understand how much he likes his company’s founders – particularly Milne.

Like the story with Milne, Fein describes his good fortune to meet Nick Bowden.  He met Nick when Bowden was still running mySidewalk – a KC based startup that originated in Omaha, but moved to KC in 2013.  Fein and Bowden had a long relationship where they would “grab coffee every couple of months and just talk.”  These meetings covered a wide range of different topics – but eventually led to the opportunity for Firebrand to invest alongside well-known VCs, Innovation Endeavors and Revolution.

Fein described his meeting with Bowden as one that started out simple, but Bowden eventually said that he was thinking about trying to spin out Replica from Alphabet (Google’s parent company).  Would Fein be interested in helping to capitalize the deal?  Fein jumped at the chance to invest in a company with the Google pedigree and support network.  Hence, when Bowden announced last week that Replica was spinning out – there was little Midwest focused Firebrand Ventures alongside the heavyweights.

—

Fein’s career trajectory was not always towards venture capital.  He started in product – helping to build early tools including time as product manager at CVideo and OmnEmail.  He moved on to join Optum as a project manager in their pharmacy benefits division.  But, Techstars changed his life.

In November 2013, John joined Techstars as the Managing Director in Kansas City at the Sprint Accelerator.  The Sprint Accelerator was a three-month, immersive, mentor-driven startup accelerator program for ten selected companies.  He described this as a “life changing experience for me personally and professionally.  This was an apprenticeship for being a professional investor.”

Through the experience, Fein was able to be mentored by David Cohen (who later became Firebrand’s first formal advisor) and Brad Feld.  Moreover, he was able to leverage the Techstars network to build an incredible rolodex that he uses to help his own venture investments.  But, more than the network function, Fein describes how it set in motion his understanding of what was essential to being a good venture investor.

He specifically identifies that most founders turned venture capitalist identify the need to have a different type of VC than the one that invested in their companies.  On its website Firebrand describes this as, “We’re the investor we wish we had when we were founders. We’re open, accessible, and responsive.  We mentor and make valuable connections.  We support founders through the ups and downs.  We have deep operational and investment experience. And, we’re true partners in the startup journey.”

One of the things that Fein described during our interview that really stuck out was when he said, “Being a startup founder is way harder to manage than being a venture capitalist.”  The two are similar in many respects, but empathizing with the founder and trying help the founder get through difficult challenges is critical to the type of investor that he sees himself as.

One of the major differences, however, is that the feedback loop for founders tends to be somewhere between pretty fast and immediate.  Whereas, most venture capitalists have to wait at least five years to know whether they have made good investments.  This long timeline means that the investor has to be in it for the long run. As Fein put it, “this is not a get rich quick activity”.

—

But, he is driven to succeed – by investing in great people and teams with unique products.

During our conversation, he described the term “firebrand” and why he thought it was an excellent name for his organization.  He defined the term as “a person who is passionate about a particular cause, typically inciting change and taking radical action.”

In the journey, Fein was joined by two other individuals – Ryan Merket and Maranda Manning.  All three met through Techstars.  Fein described his desire to work with his team because of their significant expertise – but also passion about building something special – companies and the ecosystem.

Fein told the story of how he got to know Merket.  Merket often visited Kansas City because he has family connections in the area.  Through Techstars, Fein and Merket met and hit it off.  But what really impressed Fein was that Merket was constantly building relationships, not just for himself but for the community.  Fein described the time that Merket randomly rented out a bar’s party room to have a “random happy hour” so that entrepreneurs and community members could meet each other.  He said it provided a lens into Merket and into the type of person and community builder he was.

Firebrand Ventures now has twenty-five companies in its portfolio – including Replica (KC), Dwolla (Des Moines), Zohr (KC), Crafty (Chicago), The Minte (Chicago), Local Crate (St. Paul), Super Dispatch (KC), and Fitbark (KC).

Each of these investments represent a unique set of relationships for Fein. They are the lifeblood of his venture firm and he talks transparently about how important each of the relationships is to him and to the firm.  In them, he wanted to accomplish two things: (1) to become a top tier seed fund in the Midwest and (2) to work with great founders.  “We try extremely hard to be the type of investor that we wanted when we were founders.”

To learn more about Firebrand Ventures, check out their website at www.firebrandvc.com.