John Frankel founded ff Venture Capital in 2008 after a successful 21-year career at Goldman Sachs. He began angel investing in late 1999, building a strong track record before launching ff Venture Capital to invest professionally in earlystage startups. He is deeply focused on frontier technologies— applied AI, drones, robotics, fintech, and cyber security—and champions high-engagement partnerships with founders.
Decades of Discipline, Returns That Compound
I founded the firm 17 years ago. Before that, I spent 21 years at Goldman Sachs. Toward the end of my time there, in late 1999, I began angel investing. It turned out to be a successful endeavor, and in 2008, I made the decision to leave Goldman and take this pursuit professional. That’s when we launched the firm.
Early-stage venture capital is among the most illiquid asset classes. It takes significant time to validate your investment thesis because companies often take years, sometimes more than a decade, to exit. Just yesterday, I got a call from a company we invested in back in 2011. They’re being sold this week. That’s 14 years. This particular investment has now multiplied several times over, and we’re set to deliver a solid return to our limited partners. It’s a great outcome, but it’s also a reminder of how long the process can take. Over those years, a lot can happen. Companies might get lucky with timing and market conditions, or they might face unforeseen challenges. It’s a slower game, but one that still offers high returns when played right.
“We are not in the business of chasing eyeballs or hype. We care about whether the company can actually monetize and whether the model works”
Over the past 17 years, we’ve built a strong track record. When I look at the data, 50 percent of our pre-seed funded companies go on to reach a Series B round. The industry average is closer to 10 percent. That means five or six years after we invest, about three-quarters of our portfolio is still active, compared to just one-quarter for the average venture firm. That staying power gives our companies the time they need to refine their business models, raise follow-on capital, and scale. As a result, over 11 percent of our portfolio companies have reached a $100 million revenue run rate. I don’t know the exact industry average for that metric, but I would guess it’s 1 percent or less.
Selective, Disciplined, and Data-Driven
We invest in less than 1 percent of companies presented to us. If I give you the list of attributes, it is going to sound very familiar to a lot of other VCs. It is team strength, market size and domain knowledge but we really like companies that we think can get to an early business model. We actively avoid capital-intensive opportunities. We are not in the business of chasing eyeballs or hype. We care about whether the company can actually monetize and whether the model works. That is a critical filter for us, especially at the early stage. We are not thinking about exits. We are thinking about whether the company has a clear path to $100 million in revenue.
We also invest out of cycle. What I mean by that is we do not follow trends for the sake of it. A lot of the market behaves like a herd. We do not. For example, we backed Manna Aerospace six years ago when last-mile drone delivery still felt like science fiction. Today, they have made more than 20,000 deliveries in production in Finland and Ireland. The model works. They deliver in under three minutes at a cost of four Euros per drop. Regulatory hurdles remain, but the opportunity is enormous. We tend to invest in ideas that solve the problems of five years from now, not just the ones people are chasing today.
Hands-On Help That Moves the Needle
We want to invest in companies where we think we can help and be additive. It depends on what the company is looking for. But we are often in frequent phone calls, conversations with the founders around strategy, pricing, and product-market fit, and mundane things like managing the cash flows of the business.
Only about 10 percent of pre-seed funded companies make it to Series B across the industry. In our portfolio, that figure is closer to 50 percent. We believe the support we provide contributes to that difference. That said, we do not expect anyone to take our word for it. We will not invest in a company unless the founders reference us. Anyone can say they are helpful or founder-friendly, but hearing it from another founder matters far more. We strongly believe that no founder should take capital without referencing the investor first.
Start Now, Start Smart
I think it is a fantastic time right now to start a company. If you can understand how to deploy generative AI into your product, and into how you run your business, you can really generate operating leverage like we haven't seen in a long time.
