Venture Capital Stories – Romulus Capital

Hi, I’m Neil Chheda , Co-Founder of Romulus Capital.

Tell Us About Your Journey

I’m inspired by entrepreneurs. Having been an entrepreneur myself, it is very, very hard to build a business. You’re making less money, you’re sleeping less, you’re taking more risk. And so the people that take that risk to go build something bigger than themselves, to go solve a problem that no one else has solved, that inspires me. And that’s why I do what I do.

What is Romulus Capital & What Is Its Focus?

Romulus is an early-stage venture capital firm. Our focus is to invest anywhere from seed to pre-IPO in companies that are changing the world. We tend to invest in early-stage enterprise technology companies, but we invest across the board. And right down to the name. Rome was not built in a day, and neither were great companies. That’s who we are at Romulus.

We get very deeply involved in helping our founders do everything it takes, whether it’s connecting to your first customer, hiring your first technical or non-technical person, whether it’s building a board, or scaling all the way from your first round to pre-IPO. We have folks on our team that have built companies that are deeply involved and that are there to help founders.

What Is The History of Romulus Capital?

The history of Romulus is tied to me and my co-founder. Before Romulus, I was a founder. I started a few companies. The last company I founded was the reason we started Romulus.

I founded a company in the fall of 2008, which was a terrible time to raise capital. So I raised $40,000, started a company, had no board, no advisors, no mentors. And the company eventually scaled and did well and succeeded and was acquired.

But upon reflection, everything you could do wrong as a founder, I did wrong. I hired the wrong people. Our products sucked. Our customers, I didn’t know how to deal with customers at the time. I was a kid. And so everything you could do, I did wrong. And the one job I had as the CEO was to raise capital, which I also failed at. And so when that company was acquired, once the check cleared, I remember we took a deep breath and I remember thinking, gosh, had there been someone who had been in my shoes before, who could have helped me make just a few fewer mistakes, 10% fewer mistakes, my company could have been a lot bigger. The outcome could have been much larger. And so that idea really stuck with me.

And that’s why we started Romulus, to be the type of investor that I would have wanted when I was founding companies. And so, right down to our DNA, we very much focus on helping partner with founders and solving the problems that we see founders most typically ignore. Hiring great people, building deep, technical, meaningful products, and connecting with customers. And so the story of Romulus is being the investor that we wanted when we were founding companies.

What Are Your “Must Haves” Before You Make an Investment?

We look for a lot of things when we look for investments. I ask three questions. The first question in my mind is why you? Why are you the right person to solve this problem, to build this business? We think that teams are the most critical parts of any company. And so you have to have a good reason as to why you are the right person to solve this problem, why you are the right person to build the team, to do what no one else has done in the problem we’re trying to solve.

The second question I think a lot about is why us? A company is a partnership. And you can have the right team, but the point of Romulus Capital is to help founders be bigger and greater than they could on their own. And if founders don’t have a clear sense of how we can help, or if we don’t have a clear sense of how we can help, we’re not going to be great partners. And so the second thing I think a lot about is why us? Can we uniquely and distinctly add value? And if we can’t, we’re not the right investors for you.

The third thing I look for, the third question I have is why now? We ask, why is now the moment for this team, for this product, for this technology? There are many technologies that solve really interesting problems, but the market just isn’t mature. Or there’s really great teams that are out to go solve a really cool problem, but the technology just isn’t there. And so we think a lot about is now the right moment in time for this problem to be solved. So those are three things we look for. Why you? Why us? Why now?

What Attributes Lead to Success?

That’s a great question. We think a lot about why our founders and companies are successful. We have successful founders from every walk of life. Men, women, old, young, from every possible different background. And so when we look at our companies, we see a few common threads.

Number one, teams that have a very clear definition and feeling of the pain point that they are solving. When the founders and the teams and everyone feel the pain of the customer, those companies tend to be successful. For example, one of our portfolio companies was founded by two former construction contractors, brothers, who built a company to solve a problem for themselves. They started that company six years ago, it now makes more than a billion dollars in revenue. And all they’re doing is solving a problem for themselves. So we tend to focus a lot on companies that understand the pain point really well.

The second thing we tend to find is founders and teams that are excellent about attracting and hiring great people tend to succeed. Oftentimes it doesn’t matter what you do, as long as you are building a team of the best, that team will be able to iterate and move the product forward. And so we look for founders and teams that are very good at attracting people, managing people, and employees that like to work for founders. When employees are happy, magic happens at companies.

What Advice Do You Have For Entrepreneurs?

Having been an entrepreneur myself, I will say do or do not.

Entrepreneurship is a very, very difficult path. Like I said, you’ll be making less money, you’ll be sleeping less, you’ll be taking more risk. And the truth of the matter is, most startups fail. And so you have to ask yourself, why are you doing this?

Every time I started a company, I would ask myself, is there anything else I could be doing? And when I felt there was nothing else in the world, when I was so obsessed about the problem that it didn’t matter that I was making less money, that I was sleeping less, that I was taking more risk, then I knew. And so my advice to founders is think twice. And if you know you can’t do anything else, once you know you’re obsessed about a problem, do or do not. Give it your all.

What Value Has Gesmer Updegrove Provided to Romulus Capital?

Gesmer has been incredibly valuable. They have been a true partner to Romulus Capital, and they’ve been critical to our growth.

I’d say first and foremost, Gesmer has not been a law firm for us. They have been a problem solver. Whether it’s a business or a legal problem or something in between, I pick up the phone and I call Steve. And Steve helps me digest the issue, analyze it, and solves whatever it is. It may be complex litigation. It may be a simple phone call, it may be something in between, Gesmer helps me figure out what that is and getting it done quickly and efficiently.

Why Go with Gesmer?

I go with Gesmer because they’re true problem solvers. When we’ve got a complex business problem that I don’t know how to solve, there are business and legal minds that help me pick it apart and get to the bottom of it.

When there is complex litigation, everyone at the firm is aware of what’s going on and very quickly responsive. When it’s a simple matter, everyone is involved and very responsive. And so we go with Gesmer because no matter what the problem is, I trust someone cares. I trust someone knows there’s a solution. Someone’s going to follow up, and I know that the problem is going to be solved.