Charles Edward Hudson III is the Managing Partner of Precursor Ventures, a new pre-seed fund focused on business-to-business and business-to-consumer companies. He has stepped out of the Venture Partner role at SoftTech VC to focus on Precursor, where he was previously a full Partner. Before going to the venture capital side, Charles build his career in the gaming industry, most recently as Co-founder and CEO at Bionic Panda Games, following a role as VP of Business Development for Serious Business (acquired by Zynga in Feb 2010).
Charles also founded Third Power LLC, the events company behind conferences like the Virtual Goods Summit, that was acquired by WebMediaBrands.
He holds both an MBA and a BA in Economics and Spanish from Stanford University.
Charles Edward Hudson III joins us for the first ever Venture Capital Corner, powered by Pivotal.
Tell us about the fund.
Where is Precursor Ventures based?
We're just outside of Detroit, Michigan, though we focus on investing in businesses out of San Francisco, New York City, and Toronto.
What is the size of your current fund?
We're still locking in our first ever fund for Precursor Ventures, with a target of $25 million.
What is the average investment size for Precursor Ventures?
We're targeting pre-seed companies with checks between $100k to $250k.
Break down how you find your deals.
Most of my investments come from my personal network, about 60%. The next largest category is my existing portfolio.
How do you assess your investments?
What does your due diligence process look like?
I really care about the team, so I drive deeply into their motivations. I also study the market dynamics for the market the team is pursuing.
What characteristics do you look for in the founding team?
I have to see a team for whom the problem the business is solving really matters -- that's huge. I also really like seeing and supporting first time founders.
Are you excited about any companies or industries right now?
I don't have many top-down theses. I tend to look at everything from scratch -- from first principles.
What's it like working with you as an investor?
How do you actually interact with the companies in which you invest?
I spend a lot of time helping portfolio companies with follow-on fundraising well into their late rounds. From my time working in gaming and venture capital, I also have a lot of experience in fine tuning business models -- from freemium to SAAS -- so we'll spend a lot of energy there, too.
What benchmarks and indicators get you excited?
I'm not a metrics-driven investor. I work with founders who have really clear 5 to 7 years plans and a big vision they are driving towards with their business. The most important metric is, are they closer to their vision today than they were yesterday.
What are your favorite things to do when not working?
I love scuba diving, reading, and running.
What's your best overall startup advice?
I tell founders it's their company. Take all advice as input but ultimately do what you think is right.