What If Ventures invests in startups focused on mental health and addiction recoveryRead more...
BAM invests between $50,000 and $200,000 in one or two startups every month
What everyone can agree on, though, is that there are definitely more seed and early stage funds now than ever before, and more people willing to give more and more money to young companies looking to make it big.
But just who are these funds and venture capitalists that run them? What kind of investments do they like making, and how do they see themselves in the VC landscape?
We've highlighting members of the community to find out.
Richard Jun is Managing Director of BAM Ventures
Prior to BAM, Jun served on Shoedazzle’s senior management team as its General Counsel and helped orchestrate the merger of the company with its largest competitor at the end of 2013.
Before Shoedazzle, Richard headed the corporate practice at Lee, Tran and Liang, a boutique downtown Los Angeles law firm. He was also the head attorney and lead business development executive at the US division of a prominent South Korean Entertainment conglomerate. Richard received an A.B. with honors from Harvard University, and a J.D. from the Columbia University School of Law.
VatorNews: What do you like to invest in? What are your categories of interest?
Richard Jun: Obviously e-commerce is where we cut our teeth but because we are early stage investors, we have the luxury of not being boxed into a specific category. We love it when we see an idea that jibes with where we feel an industry will trend especially if it is led by a kick-ass entrepreneur. A good proxy for how we invest is to ask - is this a company that we would be excited about starting on our own and do we believe that the person pitching us the idea can deliver on the vision? My partner Brian Lee has rightfully earned a reputation as an amazing entrepreneur so over the years I've been able to pick up on those fundamental characteristics that he possesses and be able to identify those same markers of success in the entrepreneurs we meet.
VN: What would you say are the top 5 investments you have been a part of? What stood out about those investments in particular?
RJ: We've only been around for about a year so I really can't highlight my top 5 investments. I know all of our founders work incredibly hard to breathe life into their business so listing my top investments does little to illuminate our investment philosophy or what we stand for. With that being said, we already had one exit and multiple companies that have gone on to raise rounds at significantly higher valuations. We proudly list our portfolio companies at www.bam.vc.
VN: What do you look for in company's that you put money in? What are the most important qualities?
RJ: We always look at the team first - strong team and then the idea. We have to love the team and not hate the idea. Do we like the team - is the passion, integrity, intelligence and tenacity there? Assuming that we can check the box on the team, we then look to the idea. Does it solve a real problem? How competitive is the sector? Defensibility? How large is the market?
There is a lot of overlap in the types of companies that Brian and I like but we also have our own preferences. He likes companies that are grand and transformative by nature. I remember he pulled me into his office one day and excitedly showed me a YouTube clip of a human transport drone - five minutes of my life I will never get back. I tend to favor companies that are more near term in changing the world. It works well that both he and I, as the only partners in the fund, need to agree before we invest in any company.
VN: Tell me a bit about your background. Where did you go to school? What led you to the venture capital world?
RJ: I went to Columbia Law and before that, Harvard for undergrad. I started my career as a corporate lawyer but was smart enough to know that it didn't suit my personality at all. I was able to fake it and be successful to a certain extent but deep inside I knew I didn't have the passion to be a great lawyer. This shouldn't come as a big surprise to anyone - being a lawyer sucks. Knowing that I didn't see law as a career track, I did my best to be smart about my opportunities both professional and personal and worked hard to develop the skills and knowledge I needed to be more than just the "lawyer" in the room. And when that didn't work, I asked Brian for a job and he said yes.
In all seriousness, I am where I am because I discovered long ago that if you keep your reputation clean, know the right people and, in some instances, impress them enough then you have the ability to create your own opportunities. I was coming off of being at Shoedazzle for 3 years after the merger with JustFab and saw an opportunity to formalize a fund around the great deals that Brian was seeing through his personal and professional network. As Honest Company hit hyperdrive and demanded more and more of Brian's attention, Bam Ventures was created as a means to put structure around his dwindling free time. It was incredibly important for Brian to remain connected to the entrepreneurial community - once a start-up guy, always a start-up guy - and we could only do this if there was a process that allowed this to happen. Altruism aside, being connected for Brian also had collateral benefits in that it keeps him and Bam Ventures relevant which, in turn, generates more deal flow and investment opportunities. It's my job to make sure that each deal that comes through our network is given the proper consideration that it deserves and not lost simply because Brian was too busy.
As an aside, I consider what I do as a early stage tech investor to be extremely exciting and satisfying. I wouldn't trade my job for anyone else's. As a profession, we get to sit in front of a crystal ball which on most days is hazy but once in a while offers us glimpses into what the future holds for all of us. We are at ground zero in an industry that houses some of the the smartest visionaries in the world who use their talents to create companies that will profoundly impact every facet of our daily lives in a meaningful and significant way. And the parties are great.
VN: What is the size of your current fund?
RJ: Because it was our first fund, we didn't really want to take outside capital since we felt we should really learn how to be tech investors before we started putting other people's money to work. We were comfortable investing out of our personal savings but quickly a small circle of our friends found out what we were doing and believed enough in us to become our investors. We quickly closed at about $6MM which we felt was the ideal size for a first time seed fund.
VN: What is the investment range? How much do you put into each startup?
RJ: Our range at present is typically $50,000 to $200,000 per startup.
VN: Is there a typical percent that you want of a round? For instance, do you need to get 20% or 30% of a round?
VN: Where is the firm currently in the investing cycle of its current fund?
RJ: We are 60% through the first fund.
VN: What percentage of your fund is set aside for follow-on capital?
RJ: In theory, we pegged it at 25% but because most of the limited partners in Bam Ventures are also active multistage investors we tend to be less concerned since we will always have additional follow-on capital to deploy.
VN: What series do you typically invest in? Are they typically Seed or Post Seed or Series A?
RJ: We like Seed and Pre-seed but have done all stages. We follow the opportunity.
VN: In a typical year how many startups do you invest in?
RJ: When we first started we were doing about 2 to 3 companies a month. I think this year we want to focus on 1, possibly 2 a month with larger check sizes.
VN: Is there anything else you think I should know about you or the firm?
RJ: As hokey as this sounds, we are entrepreneurs investing in entrepreneurs. At the seed stage, there really isn't a better way to filter an investment than to look at the founding team. I think Brian and I pride ourselves in backing entrepreneurs who posses the qualities that we believe are critical for embarking on the incredibly arduous, often-times lonely, but immensely gratifying road of building a company of significance.
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