Andreas Klinger discusses his journey of starting a venture capital fund focused on remote work tools and the subsequent learnings from his investments. He highlights the significant demand for remote work solutions during the COVID-19 pandemic, resulting in a rapid increase in valuations and funding opportunities in the sector. Klinger shares key insights on investment strategies, the evolving landscape of remote work, and advice for founders on navigating fundraising in the current market.

1. 🏝
I started a VC Fund at
Running Remote 🙀
What happened.
Running Remote 2023 – @andreasklinger
The learnings.
The outcomes.

2. Andreas Klinger
$ whoami
👋😬
@andreasklinger
Hi.
• Previously
• CTO @ On Deck
• Head of Remote @ AngelList
• VPE @ CoinList
• CTO & Founding team @ Product Hunt
• Founder of several startups & companies
• Currently
• angel investing via a small microfund
• www.remote
fi
rstcapital.com 🏝 (<- topic of this talk)
All slides on twitter.com/andreasklinger

3. This talk is not a general endorsement of venture capital
• VCs spend plenty of money on stupid things
• And too many VCs are too full of themselves
• Most companies should not raise risk capital
• Fwiw I always recommend to not raise by default
• The goal of entrepreneurship isn't to raise money,
but provide for you, your family and your team's family
• But… VC frequently enables innovation and progress
• And innovation is what drives humanity forward
• So it's worth understanding how it works.
Disclaimer #1:
Not an endorsement of VC
@andreasklinger
🧐
Look at all the plebes here…

4. I don't claim to be an expert for startups or VC
- Learned to deconstruct a fairly complex industry
My full-time job is leading engineering teams
- I have been investing "on the side"
Disclaimer #2:
Not an expert
@andreasklinger
😶🌫
hot smoke everywhere

5. Let's start at the
beginning…

6. • 2019 I spoke at Running Remote about
engineering management
• In the last 2 minutes I asked if anyone would
be interested in joining a project of mine…
• an investment syndicate to fund remote
work tools
• so many people reached out that i decided
to do a small fund instead
A long time ago
on an island far, far away…
@andreasklinger
How to Manage Remote Engineering Teams for Scale
https://www.youtube.com/watch?v=EKSGhOBnRPw

7. • 100+ LPs
• founders and operators of
remote teams
• early investors in remote
teams
• First fund $2.5M
Remote First
Capital
🏝
100+ calls later 😅
and many more…

8. • Teams that are fully remote?
• That's like investing in teams that are using
standing desks, not a quali
fi
er by itself
• Tools for remote work?
• Yes, but there are only so many zoom's out there…
• Answer: in an overall trend
Now… what to invest in? 💸
@andreasklinger
🏝

9. #1 In every possible future we will work
more digital, more online, or more global
My thesis for RFC I (2019) 🏝
@andreasklinger
#2 All large companies are distributed teams in denial
• Global digital online work will be the norm
• This requires rethinking tools for every job
and allows new global competition unlocking millions of new jobs
• They have multi-city o
ffi
ces, large campuses, etc etc…
• If you work at (eg) Google you are more likely to meet your team in calls than in person
• Tools that work for fully-online teams are needed by larger companies too
• Distributed teams are a great early testing-ground for online collaboration software
#3 Talent exists worldwide, customers are online
• International teams compete for global customers
• This creates new kinds of opportunities

10. • Keep in mind…
• 2019 was a di
ff
erent time
• Remote work was still considered a niche topic
within "the future of work"
• Distributed teams were considered odd and
barely investable, especially if the founders were
not based in the Bay Area
• Investing internationally via zoom only was
considered inconceivable by many investors
• Global Talent considered inferior to SF/Bay Area
talent
A di
ff
erent time…
@andreasklinger
:)

11. I expected i can peacefully deploy for 2-3 into a niche,
not taken serious by major VC
fi
rms…
Started investing…

12. I expected i can peacefully deploy for 2-3 into a niche,
not taken serious by major VC
fi
rms…
Started investing…
online-
fi
rst conferences
global payroll
global equipment
e
ffi
cient online meetings
documents with work
fl
ows
intranet software
incentive programs for rural america
and few more…

13. I expected i can peacefully deploy for 2-3 into a niche,
not taken serious by major VC
fi
rms…
Started investing…
online-
fi
rst conferences
global payroll
global equipment
e
ffi
cient online meetings
documents with work
fl
ows
intranet software
incentive programs for rural america
But then… 🥁
and few more…

14. COVID LOCKDOWNS 🔒🦠
@andreasklinger
Plot-twist… 🙀

15. - crazy levels of revenue growth
@andreasklinger
Tools enabling remote work were in demand
Two things happening at once 👀
Low-interest rates increased valuations a lot
- crazy levels of valuations
=> Large funds investing a lot in remote work tools

16. Lots of investments.
Next months were crazy…

17. @andreasklinger
Investment Focus
Remote Work: Core Infrastructure
remote.com
Global Payroll (
fi
rst-round)
usestable.com
Mailboxes for international
teams (
fi
rst-check)
opalcamera.com
Modern camera equipment

18. kubrio.com
Online-
fi
rst kids education
(
fi
rst-round)
tomorrow.university
Online university for
sustainability (
fi
rst-round)
@andreasklinger
Second degree e
ff
ect: Education
Investment Focus
dawere.us
A
ff
ordable online highschool
education for LATAM

19. heightslabs.com
Fighting money-laundry with
graph-theory
fonoa.com
Real-time global taxes for
businesses
@andreasklinger
Second degree e
ff
ect: Finance
Investment Focus
acquire.com
Global startup acquisition
marketplace (
fi
rst-check)

20. pesto.tech
International Jobs for Indian
Engineers. They 2-4x salaries.
teamrora.com
International career advice
and salary negotiations.
@andreasklinger
Second degree e
ff
ect: Global Careers
Investment Focus
gitstart.com
Work-experience for global
junior developers.

21. rarebase.com
Global research to reuse
drugs for rare diseases. (
fi
rst-
round) @andreasklinger
Second degree e
ff
ect: Much more…
Investment Focus
pawtrip.com
Book
fl
ights for animals. 🐾
(
fi
rst-check)
wise.live
Software for online tutors in
India (
fi
rst-round)

22. Mistakes made 💀 1/76
@andreasklinger
I should have "index-invested"
– To avoid "con
fl
ict of interest" I didn't invest in products going after the same markets.
– There can be multiple winners in large-enough market
– Eg rejected Deel and similar companies
Too product focused
– I am very product-minded
– Frequently projected my own product ideas into other people's companies
Too narrow thesis initially
– Strict thesis-focus limited success
– eg i rejected companies like Supabase (engineering not part of thesis yet) & Vercel (to late stage)

23. @andreasklinger
Don't half-commit
– Stick to one check-size
– Either believe in it… or don't.
– Nothing inbetween, no "half-checks"
Have a decision framework earlier
– Making my mental model for decisions explicit, helped me explaining why i invest or don't
– Link: https://klinger.io/posts/how-i-make-investment-decisions
Let myself talk out of deals
– Over-value feedback from other investors or industry experts
– In reality nobody knows and you should be able to only blame yourself
Mistakes made 💀 2/76

24. - $2.5M – Fully Deployed – 3.5 years old
- TVPI: 7.49x (6.26x net) IRR: 94.6% (83.4% net)
- In total about 50 investments
- Launched before the "VC hype" of 2021
- so lots of this is "paper value"
- tbd how paper-value of "covid-hits" translates to real success
- on the other hand: normally you don't even evaluate VC funds before several years
Fund Performance 📈
@andreasklinger
RFC I:

25. Is this success?
@andreasklinger
My POV
- Who knows what paper-value will translate
- Some might just be overpriced by VC
- Some might just be temporary Covid-hits
- Hard to judge funds early
- Imho you could cut the top 20% of the fund
and still have a crazy returns
Temp(?) COVID19
Market changes
Temp(?) VC
Market changes

26. RFC II 🏝
@andreasklinger
$8.5M Fund
– Started mid 2021
– Raised most of it in two weeks, with one email and no calls 👀
– Almost all LPs were RFC I LPs
– Re-opened to let about 100 new small-check (sub 10k) community LPs in
Learn from mistakes / Continue what worked
– Larger check-size ($100k) and stick with it
– Wider thesis (include engineering tools, open-source, new trends, etc)
– Focus on super early stage (
fi
rst-check and
fi
rst-round were possible)
What then? Of course! A 2nd fund

27. A changed market
VCs sobered up
- harder to close rounds
- lower valuations
Remote work as a topic is oversaturated
- Remote work is no longer a niche
- Tooling space is a bit oversaturated
- We no longer call it remote work, we call it work
- Remote became the default,
co-located became the thing people mention
2nd Plot-twist:

28. Leveling up Remote Work
@andreasklinger
RFC II 🏝
New tools to level up organizations
culturescience.io
Alerts you if mid-managers
burn out your team
shapesxr.com
VR collaboration tools
buildbetter.ai
"What do my customers need
but my product team isn't
doing" AI

29. Rethinking Global Work
@andreasklinger
RFC II 🏝
Remote work is more than just work in front of zoom
meragaonapp.com
Nextdoor for indian rural
communities. (
fi
rst-round)
snaptrude.com
Autocad in a browser,
collaboration-
fi
rst
aidaly.com
Helping at-home caretakers to
get bene
fi
ts (
fi
rst-round)

30. Rethinking Blue Collar online-
fi
rst
@andreasklinger
RFC II 🏝
Everyone is now growing up online and working via the internet
skillbee.com
Improved work conditions for
asian immigrant workers (f-r)
werk.eu
Europe-wide jobs for
construction workers (f-r)
hammr.com
Payroll and HR software for
construction workers (f-r)

31. Overall wider thesis, frequently with a focus on open-source
@andreasklinger
RFC II 🏝
webstudio.is
Open-source web
fl
ow (
fi
rst-
check)
ambient.run
Opensource 3d game-engine that
runs in a browser (
fi
rst-round)
cal.com
Open-source scheduling
software (
fi
rst-round)

32. Double-down on earlier investments
@andreasklinger
RFC II 🏝
Reasonable success with
fi
rst-check and
fi
rst-round investments
Made this now the focus of the second fund.
lumalabs.ai
Photorealistic 3D VFX studio
in a mobile app (
fi
rst-check)
o
ff
siter.com
Full-service O
ff
sites (
fi
rst-
check)

33. - $8.5M in total – $4M still to deploy - 1.5 years old
- TVPI: 1.16x (1.13x net) IRR: 14.4% (11.6% net)
- 40 of 70 investments so far
– Launched during/after the "VC hype" of 2021
- Strong focus on super-early stage (
fi
rst-checks etc)
- Starts to see a lot of markups now
- Personally i believe this one will outperform RFC I but time will tell
Fund Performance 📈
@andreasklinger
RFC II:

34. - "If more people work online then…"
- This is what rethinks whole industries
My Learnings from the last years of investing
@andreasklinger
Remote Work is now a default
Global Work is here to stay
Always look for secondary e
ff
ects
- Every industry competes internationally
- This enables non-exploitative geo-arbitrage
- At short-term risk to create an "international upper class"
Could become a target for resentment, populism and nationalism during the recession
- Remote work is no longer "fringe", it's a normal job of every HR and ops team worldwide
- Dare to look for new not-overrun trends; but which ones… ?

35. - Countries can't rely on Ukraine, China, USA, etc on resources and production
- Outcomes: Micro-powerplants; Micro-factories; Automated resource extraction, etc
Next Big [not yet overrun] Trends (all imho)
@andreasklinger
De-globalization of resource dependence
Opensourcing Enterprise
- Data-compliance laws, self-hosting and customization will favor solutions built open-source
- Outcomes: Global enterprise (eg HR) software winners be open-source; Self-hosting will become common again
Death to Desktop Apps
- The web has won; Desktop and operating-system dependent apps are dead
- The next frontier is local-
fi
rst webgpu-enabled web-apps with hyper-performant backends
Roll Ups
- During the recessions a lot of Micro-PE
fi
rms will acquire companies.
- Smb and blue collar businesses could be especially interesting here (economies of scale)

36. Ok puh… Still energy? 💪⚡
@andreasklinger
Let's switch the side of the table 🔁

37. Deconstructed
Fundraising Advice
6 lessons learned for founders
to raise in this new market

38. #1 No VC wants to be contrarian
Most see investments like a train-station
• Know which trains might be leaving and where to
• Jump on the train as late as possible without
needing to run to the next station
• => Your round is usually very cold and then suddenly
very hot
VCs talk about being contrarian in podcasts or twitter
• They want to be earlier, not contrarian
• => The best way to get one investor interested, is
having two investors interested

39. #2 Fundraising = momentum + narrative
Narrative: Whats a bigger trend you connect to?
• The culturual, technlogical, etc change?
• Easier to bet on trends than companies
Momentum: Important to control
• "Not fundraising but…" until you are ready
to open and close a round
• You can always accept SAFEs
🏁 🏃💨

40. #3 Don't pitch "startup investors"
"Startup investors" are
fl
ooded with pitches
• Usually they don't give actionable advice, only intros
• Instead look for experts with domain knowledge
• Ideally founders
• eg split your business in 4 boxes and look for
experts in each
• Get advice & investment from them
• Then ask for intros from them to "startup investors"
Additionally:
• Have a list of people you want intros to
• Come out of every meeting with multiple intros
food delivery drones
international growth mobile app
Splitting your business in sub-areas
allows you to
fi
nd experts that are non-
competitive

41. #4 "Come back when you have more traction"
When they say they want to see more execution
it just means they don't believe
the innovation and credentials of the deal.
Innovation:
- Similar to things that exist but di
ff
erent or fundamentally new?
Execution:
- 1000B in revenue or not even started?
Credentials:
- Who are the people involved? Which domain expert already invested
To raise: Be strong in two of them.
Frequently it's easier to slightly pivot the innovation or get credible
experts to invest than to impress with unde
fi
ned execution targets.

42. #5 unbounded vs bounded expectations
• For an investor:
• Missing "the one outliar deal" is more expensive than
investing in a few wrong deals (power-law distribution)
• Early-stage it's hard to evaluate if something is better
• Easier to evaluate if it's new
• Easier to bet on something that could go "anywhere"
• Than something that might just perform like existing solutions
• Early stage: you raise on expectations not realities
• Later stage: more and more benchmarks are available

43. #6 Your goal is not to fundraise, nor to create "venture returns"
• If you can… dont raise money
• Focus on building a successful company
• Become rich, provide for your family
• Don't worry about making investors rich
• *You* don't need a 100x "venture return";
only investors do
• VCs don't look for a successful company
• They look for a company as successful as 100
successful companies
• The few outliars have to
fi
nance the long-tail in the
portfolio
RFC portfolio multiple-
distribution 3.5 years in.
Few winners
fi
nance the
whole fund
<-

44. Thanks for your time 😬👍
Sorry for the speedy pacing. Hope this was useful.
Available on twitter for questions via DMs
@andreasklinger