K9 Ventures makes room for the beginning.

On April 17, 2019, Manu Kumar stopped for lunch between meetings. Lunch was an apple and peanuts. The occasion, he realized, was the tenth birthday of K9 Ventures, the investment firm he had founded. He had once imagined throwing a party. Instead, his Wednesday schedule consisted of nine or ten consecutive, 45-minute meetings with portfolio companies. Somewhere between the apple and the next appointment sat a fairly useful explanation of his business.

Venture capital is usually described in dollars. K9 becomes more interesting when measured in hours. Its wager is that a small number of companies, receiving sustained attention while they are barely companies at all, can justify an entire firm. The constraint is the point. A packed calendar tells you something a fund announcement cannot.

A check small enough to matter

Kumar arrived at investing through building. He founded SneakerLabs while studying at Carnegie Mellon, later helped build the conferencing business iMeet, and earned a computer science doctorate at Stanford. Helping Ren Ng get Refocus Imaging, later Lytro, off the ground exposed a peculiar hole in the market: the investors he encountered wanted to write $3 million-$4 million checks. Companies still wrestling with technical uncertainty needed something smaller.

K9 formed in April 2009. Its first fund totaled $6.25 million, with initial checks of $100,000-$250,000. This was the space between an individual angel and a conventional venture fund. The work was unglamorous and consequential: help a technical team turn an idea into something another person could actually use.

The first obstacle was raising the fund itself. Kumar later recalled beginning fundraising in July 2008, an awkward moment to ask for trust. In January 2009, he decided to begin with his own money. Investors from earlier companies joined; the initial closing was $3 million. The first experiment was persuading people to finance the experiment.

The fund that resisted getting bigger

Fund II reached $40 million in 2012. Fund III closed at $42 million in August 2017. That modest second step was deliberate. Kumar argued that bigger funds push investors toward bigger checks and later companies. Eventually, the investor who promised to help at the beginning needs you to be further along.

The number 42 also carried a joke: Douglas Adams, naturally, and Kumar’s age at the time. Under the joke was a business decision. K9 was choosing the size of its job. Its stated investment pace today is four to six new companies annually; the 2017 announcement described three to four. Neither figure is a tally of actual investments in every subsequent year.

The portfolio gives this approach recognizable faces: Twilio, Lyft, Carta, Auth0 and Gradescope. Their businesses span communications, transport, ownership records, identity and education. The pattern is not a fashionable sector. It is a technical capability or a market opening that a founder can turn into a business.

The price of a real partnership

K9’s offering combines ownership capital with operating help. Its current published initial range is $250,000-$750,000, centered around $400,000. Founders receive funding; limited partners supply the money behind the funds and seek investment returns. This is an equity relationship, with the investor’s payoff tied to the value of its holdings.

K9 prefers to lead, take a board seat and remain involved through the early financing stages. Product decisions, pricing, hiring and the next fundraise are all part of the conversation. The firm also reserves money for follow-on investments. The Kennel, described in its 2017 announcement, offered portfolio companies optional, free, invite-only workspace. Even the office had a selective admissions policy.

There is a clear cost to founders: selling equity and accepting governance. K9 uses priced rounds rather than SAFEs or convertible notes. A priced round settles ownership terms immediately. In a 2011 essay, Kumar argued that early boards teach founders to step away from daily emergencies and think strategically. Founders seeking a passive check should pay attention to that preference.

He also objected to making startups reimburse investor lawyers. In September 2018, he reported that K9 had never charged a portfolio company legal expenses. That is a dated statement about its practice, not a promise that financing has no costs. Company counsel still has work to do. The useful question for any founder is who pays which bill.

“Investors should pay their own legal expenses.”

MANU KUMAR / SEPTEMBER 2018

Then the founders said no

In February 2020, Kumar discovered Pragli, a virtual office for remote teams. He used it at HiHello, the company he was running, then spoke with its two founders. He wanted to invest. They were not ready to raise venture capital. An interested investor was not sufficient reason to change their plans.

They stayed in touch. As the pandemic changed working arrangements, the conversation reopened; K9 led the pre-seed round, which closed on April 2. Kumar described beginning work with the founders before the financing finished. His account offers a practical example of investor fit: he had experienced the problem, tried the product and brought specific ideas about pricing and distribution.

The product also challenged his own position. Previously opposed to remote work, Kumar wrote that better collaboration tools had converted him. K9’s current criteria welcome distributed teams while retaining a preference for Bay Area founders and rejecting outsourced core development. The distinction is instructive: where people sit can change; whether the team can build its technology remains central.

Borrow the discipline

A founder can use K9’s public writing as a filter before asking for an introduction. Can the team build? What is technically new, or newly possible as a market? Who pays? Why is this the appropriate amount of money now? K9 favors direct payment from customers and says advertising, content, media and e-commerce businesses fall outside its criteria.

The approach has boundaries. A company that already has institutional funding may be too far along. A team needing a much larger first round, an outsourced development shop or an investor without a board role has reasons to look elsewhere. Concentration also leaves fewer places to absorb mistakes. Kumar’s 2017 account reported two shutdowns among the first fund’s nineteen investments. Attention cannot remove risk.

The transferable idea is to budget attention as deliberately as capital. Choose fewer commitments; specify what the next check should accomplish; question the costs everyone accepts because everyone accepts them. You need not raise a venture fund to copy that. You do need to leave enough room on Wednesday to answer the phone.