How This $200M Investor Finds the Next Billion-Dollar Idea

Manav: I was an investor in the first company that created AR glasses — they became Snap Spectacles. I was an investor in Coinbase, the preeminent gateway for cryptocurrency, and an investor in Amplitude, the mobile-first analytics platform. In this episode of Emerging Founders with Manav, we're talking to Adam Draper, founder and managing director of Boost VC — they're the most active deep tech investor on the planet, averaging one deal per week. Adam has been investing for the last 12 years, with an average check size of $50K to $500K. In this episode he tells stories about how he met Brian Armstrong, how he ended up investing in companies like Coinbase and a bunch of other unicorns, and he breaks down a lot of his writing too. Stick around to the end, there are a lot of nuggets of wisdom here.

I'm really excited to have you on the show, Adam — how are you doing today?

Adam: Hey, thanks for having me on the show, Manav. My name's Adam Draper, and Boost VC is the pre-seed fund for deep tech. We average about a deal a week — we typically like to be the first check writer, so we write $500,000 checks into pre-seed rounds, and we try to specialize at the cutting edge, backing amazing founders trying to solve genuinely hard problems.

Manav: How did you end up deciding deep tech was the vertical you wanted to pursue?

Adam: Honestly, I've always done deep tech. I was an investor in the first company that made AR glasses — they became Snap Spectacles, but the company was originally called Vergence Labs. I was an investor in Coinbase, the preeminent gateway for cryptocurrency, and in Amplitude, the mobile-first analytics platform. Really, the honest answer is: the types of deals that make it through my personal filter have to be pretty insane to reach me. I was 26 when I started investing in startups.

The companies that get through the filter of governments, big corporations, and traditional venture firms, and then reach me — if it's a classically "good" idea, one of those three groups probably should've already picked it up and invested. So I've always spent my time on the things that slip through that filter, and those happen to be the things that end up actually changing the world. That's special.

Manav: Investing in Coinbase seems like an obvious no-brainer now — 40 million-plus Americans own crypto — but back when you actually invested, what was your conviction, what was the story behind that deal?

Adam: I have so much to thank Brian Armstrong for. I hadn't even heard of Bitcoin when I met him.

Manav: What year was this?

Adam: 2012. He was on a list of companies, and I reached out to him, basically, "hey, my name's Adam, I invest in some startups," and I proved it by listing a couple of the startups I'd backed. To his credit, he took the meeting. We met, and he didn't lead with Bitcoin, which was refreshing and different from everyone else pitching crypto at the time. What he said was, at some point the world is going to run on one financial infrastructure — and that phrase made sense to me. At the time, people were using Skype, Zoom wasn't a thing yet — you could call anyone in the world, but you couldn't actually pay anyone in the world, there were all these gatekeepers standing between you and being able to pay someone. I thought, yeah, that tracks — Venmo was just barely starting to exist, there weren't really easy financial tools for that yet.

The second thing that really stuck with me — he said, very rationally, "this could be a trillion-dollar opportunity," and he didn't mean Coinbase specifically, he meant Bitcoin holistically. And he was wrong — it's already a $2 trillion-plus opportunity, and it keeps growing every day.

I ended up sitting on the decision for a while, didn't commit immediately. It turned out he'd already met with a hundred other investors, and basically nobody had said yes.

Manav: This was the seed round?

Adam: Yeah, exactly, the seed round. One day I'm mulling this over, and I'm reading an old issue of The Economist on the toilet — a 2011 issue — with a headline like "Bitcoin Bubble Burst?" I'd read it before, but never actually noticed this particular article. Reading through it, it's essentially saying the bubble burst, and the price had dropped from $30 down to $2 — but by the time I'm reading this, the price is already back up around $10. Someone clearly wants this technology to exist. So I called him and said, "I'm in." He asked, "for how much?" and I said, "I don't know."

I ended up investing in Coinbase, and one thing he did that a lot of founders don't do — after I invested, he actually called me personally and said, "hey, you're in, thank you so much, I really appreciate it." I think every founder should call their investors like that — it's rare enough that I still remember the call. During that same call, he actually tried to upsell me on buying Bitcoin directly too — I hadn't bought any Bitcoin myself at that point, I was purely betting on a guy I found genuinely impressive. I told him, "Brian, I just invested in you, I'm not putting in more right now." Bitcoin was $10 at the time — that would've been the best investment I ever made.

Manav: I want to pivot into founders, since this show is called Emerging Founders. Say I'm a founder building in deep tech — building a humanoid robot company — and I'm approaching investors. What are you actually looking for when you talk to people? What qualities, what traction, how do you filter?

Adam: My favorite founders are the ones who are genuinely good at letting their guard down — non-defensive, because they're actually self-confident in what they can do, and they're listening for that little edge that might help them, because they believe knowledge can come from any direction.

What I'm really looking for is someone willing to take on a genuinely monstrous challenge — huge. You need to be able to clearly define what that challenge is, what you're doing, how you're doing it, and what you need help with. People who can ask specific questions for help generally get further than people asking vague ones — you're looking for someone who really understands what they're asking for and what they actually need.

In a pitch session, what we're really trying to identify is the moment this person became inspired to start the company — if they know the actual energy source behind why they're building what they're building, you're trying to locate that and understand it. We back companies with a million dollars in revenue off a working software product, and we also back companies that might not ship a product for six years — but either way, they need some sense of how it'll eventually get funded, and they need to have obsessed over the idea long enough that they're genuinely intimate with it and can explain a nuanced vision clearly.

Great founders have real clarity — they can explain very complex things very simply. From my side, my whole goal in a pitch is figuring out exactly what risk I'm taking on if I invest, so you need to help me narrow that risk down, explain why I should feel that risk is minimized, and why I should be excited both about what you're doing and about your ability to actually build it. I don't love it when people say things like, "and then I'll raise the Series A" — because you don't even know who you are yet as a company, you haven't figured that out yet. Those pitches are tough for me. It's a little sad, but that's just not how it works — it works when you've genuinely earned it.

Manav: I was reading your newsletter, and one phrase really stood out to me — "there is no lion in the bush." Can you expand on that?

Adam: Me and my friend Colin West, who runs Ensemble Ventures — whenever we get together, we end up talking about how the universe works, it's a recurring theme in our conversations. One phrase we always come back to is "there's no lion in the bush." It's about that moment when you're facing a decision, and you know deep down you'd like to take the risk, but you convince yourself the "safer" option is actually better, because it feels more certain. We evolved over a long stretch of time where hearing a rustle in the bush genuinely meant there might be a lion there. But as a society, we've evolved past the point where lions are actually the threat in the bush — and yet we still invent all sorts of things to be afraid of that really aren't that big a deal.

Whenever Colin and I are together — honestly with anyone, but especially with Colin — and I'm working through whether to do something or not, we both fall back on that mantra: there's no lion in the bush. It makes taking the higher-risk decision easier, because it forces you to actually think through what the real downside is.

Manav: One thing I want to touch on — you actually wrote an article about this — you mentioned it took eight or nine years to get Boost to where it is now. I want you to talk about that first seven or eight years of grinding through the storm, which is really the reality of the early years of building a venture fund.

Adam: The article you're referring to, I called it "Nothing, Nothing, Nothing, Something." When we started Boost VC, we genuinely had $0 under management — well, we had $500,000 that we'd originally raised for a crowdfunding website, and we ended up converting that crowdfunding platform into an actual fund over about a six-week window, which is when we landed on the idea of investing in startups instead.

In the first 100 days, we ran a program, invested in seven companies, and ran a demo day — an event where we invited a bunch of investors. If I could push one piece of advice on any startup, it's this: launch as often and as fast as you possibly can. That's been incredibly valuable for Boost — we launch our program four times a year, and we run demo days twice a year. It just makes you better — it forces you to keep asking, how do I make this a little better, what do I tweak. I don't think people hit "launch" nearly often enough — everyone wants to stay in stealth, convinced they have some unique insight the world isn't ready for, when really the world is ready, they just need to actually try it, let the world tell them it sucks, and be okay with that.

For our very first demo day, I honestly borrowed and begged 70 people to show up to that event. Then I raised a $6 million fund — our first real outside capital, from about four investors who put in on top of the original $500K. $6 million sounds like a lot, but a fund that size genuinely can't generate enough management fee revenue to pay employees, or really anyone. My partner and I ran extremely lean — I don't think I paid myself much of anything for the first three or four years. That whole stretch was basically the $500K plus the $6 million fund.

Then we went out to raise our first real institutional fund, and we got fortunate — we'd built a real brand as "the Bitcoin investor," the fund that specifically invested in Bitcoin-related startups. We were early, and basically nobody else wanted in on that space, so we were writing checks as small as $10,000, and founders were incredibly thankful, and we were picking up a pretty sizable percentage of these companies for very little capital.

By around a thousand days in — roughly two and a half, three years — we'd had maybe two markups and done about a hundred deals. Looking back four or five years into Boost, nobody had really piled money into the fund — we were kind of this weird sideshow doing Bitcoin-related things, growing out in the wild somewhere, and we just never looked like what the mainstream wanted. We were genuinely an acquired taste, but we were fortunate enough to eventually attract the capital to raise our next fund, which ended up being $38 million — a big deal at the time. The reason we could pull that off was that institutions, individuals, and family offices were finally getting curious about Bitcoin, and we'd already built that brand, so right as curiosity peaked, we were there ready to fundraise.

Then about eight years in — 2021, 2022 — Bitcoin goes gangbusters, Coinbase becomes the darling that goes public, everything hits at once. But there was a full eight-year stretch where basically nobody was fundamentally interested in what we were doing, and we just had this internal conviction that we were still backing good people, and that's really why we kept doing what we were doing — we just wanted to invest in great people, give them a shot, and let them go make good judgment calls going forward. We're on Fund 4 now, and if I managed your money before 2019, I've returned you at least 2x your money — give me a dollar, I've returned at least two, and in some cases, by this coming January, closer to four.

Manav: One small phrase I saw on your website: "be the cockroach." Can you explain what you mean by that?

Adam: While we were going through the journey of investing in startups, and largely nobody was investing in us after the fact, but we were dedicated to the Bitcoin space — our very first deal ever wasn't even Bitcoin-related, it was an on-demand food delivery startup called Favor, with two fantastic founders, Zach and Ben. They nearly ran out of money something like seven separate times, but they just kept growing volume, kept doing more deliveries, kept figuring it out.

I realized that was exactly the type of founder I wanted — no complaints, no matter what, they were going to survive. They never complained about running out of money, they just... ran out of money, and dealt with it. We started calling them cockroaches internally — like, "oh, they'll be fine, they're cockroaches." The great thing about cockroaches is they're incredibly hard to kill — in a competitive environment, nobody wants them around, they can survive without oxygen for a surprisingly long time, and they're genuinely good at collaborative problem-solving in a colony sense.

We realized there was this creature most people find gross, negative, off-putting — and that became the animal we wanted to invest in. We wanted to back these cockroaches who eventually become something else entirely — beautiful phoenixes, or whatever metaphor you want to use.

Manav: That's such a good takeaway for me personally — it's almost like a sub-community, I identify as a cockroach now, going to persevere no matter what I'm doing. I really like what you write, and I wish more people would go follow your newsletter. Adam, how can people find you?

Adam: Feel free to email me, it's adam@boost.vc, that's probably one way to find me. The other is following me on Twitter, probably the lowest-friction option, @AdamDraper. I also write a blog called "Things I Write," which we actually covered a lot of today.

It was great to hang, Manav, thank you so much.