by Krishna K. Gupta
Romulus is in its 10th year of existence, and I thought it would be fun to launch a (decennial) activity: 10 monthly blog posts, both reflective and forward-looking in nature, that shed light on how our unique decade of experience has shaped who we are as a firm and as people.
This first post takes us back to our founding days in 2008, when some of the same values that permeate Romulus today helped shape our original vision and took us from an idea to the completion of our first deal.
The idea of Romulus came to me in Q1 of 2008, when I was a junior at MIT. I had recently gone through a very difficult break-up, and my mind became a chamber of chaos. Disorder was somewhat freeing — I received my first, then my second “B” — and I found I didn’t care. I was coming up with all kinds of ideas. I ached to create something that would define me and represent the creative energy inside me.
As I was spending more time with my entrepreneurial peers at MIT, I started realizing that they were collectively lacking foundational thinking in crafting their businesses. They were mostly preoccupied by concerns such as:
· Should I just sell my IP or should I build a company?
· How do I build my MVP?
· How do I interact with large corporates?
· How do I raise my first $50K $500K?
Over spring break, I realized I could start a company that could help my fellow entrepreneurs build these foundational planks for their companies. I could help build larger, more impactful companies that reflected the world-class talent we had coming out of MIT. Lawyers told me this kind of company was called a venture capital firm. I soon realized not only that the aforementioned problems entrepreneurs faced were real, but also that most other venture capital firms had turned into process-driven betting machines rather than focusing on helping build companies. Further, they were not actually helping entrepreneurs solve foundational problems.
I brought on 2 friends, Cankut and Anant, as partners, and we were off to the races. Like any good startup, we started with an elevator pitch — one that summarized the problem we were trying to solve and our solution.
We initially targeted a fund of $50–100K and eventually expanded our ambition. I had never seen this kind of money, so these sums all seemed extraordinarily high, and I had no idea what investing involved. But we had deep conviction in what we were doing, which is critical to starting anything, and in some ways, my naivete helped drive my conviction. I recall that frequently today, and I try to avoid dismissing an opportunity simply because we don’t know anything about it; in fact, I’ve often believed that knowing too much can be a major disadvantage — it can spur both arrogance and complacency.
We iterated on the name a fair bit. The first thought? “Vulcan Capital Partners. Engineering your success.” The idea of building, not betting, of engineering growth, was core to what we wanted to do. But we eventually tossed Vulcan out, in favor of a name with more gravitas, which nodded to ancient history:
On our website, we chose the tagline: “Romulus Capital promotes progress, not process. And continual progress is what fuels a fledgling startup, a sustainable success, and, if you’re strong enough, an industry leader.”
I was interning at JPMorgan that summer, in the Technology banking group in New York. I would get off work around 2 or 3AM, then get to my Romulus work: sending emails out to potential investors, advisors, and to our team. It was a brutal summer, but it allowed me to incubate with pure entrepreneurial hustle. This was my startup, and I would do anything to get it off the ground. Often, execution is all that matters during the most critical moments.
The first investment arrived at the end of the summer, from an MIT alum who literally just wrote me a check off a cold email. I hadn’t even set up a bank account yet! Sometimes you get lucky, and as a struggling entrepreneur, you are thankful (and never forget) when you do. This “angel” investor is an incredible human being who has continued to extensively invest with us since then.
2 weeks later, Lehman Brothers crashed, and we were firmly in the midst of the Great Recession. Moreover, I was essentially alone from this point onward, as my 2 partners had moved on to other full-time positions (understandable as there was no income to draw from Romulus!). Everything slowed down.
The media surprised us in November by writing that we had closed our fund, which was nearly as far from the truth as you could get — we had just a small amount of money to get started with investing. We are far savvier today in interacting effectively with the media, but that was not the case back then.
By this point, we had started looking for interesting startups to help build. We drew up a preliminary “Investment criteria” that we used as a framework by which we could evaluate opportunities. As I look at it today, we have certainly become more sophisticated in how we ask the questions, but the questions themselves haven’t changed too much! We have always employed a rational, data-driven, but also very uniquely human approach. We have always believed that being human — and drawing on these human superpowers — itself can be a real advantage for a team.
After speaking to several companies, I verbally agreed to our first deal in mid-November — more than 6 months after the initial idea of Romulus had come to me. Of course, we “shook” on the deal at 4:30AM, a time when MIT students are often very much wide awake!
E la Carte became our first portfolio company just before Christmas 2008, and we became its first investor. It took us many months to find another investor to put in capital after we had deployed our $150K (our founding Associate Tewfik Cassis had chipped in to this initial amount).
We believed in the team’s product vision, and the idea that technology — in this case, table-top restaurant tablets for gaming, ordering, paying, and more — could enable an industry that was massive but also massively underexposed to the benefits of technology. Equally importantly, I also found Raj incredibly thoughtful and straightforward — our discussion and negotiation was very authentic. These are traits I grew to appreciate and embrace more over the years.
It took the company some time, but it’s now on a tear. The restaurant industry is investing heavily in technology as it recognizes the need to invest for the future, and I believe we are in the early stages of the industry’s “digital transformation.” We’ve invested significantly more capital in the company, I’m now on the board, and Raj and I still speak every couple days over GChat — these are the truest signs of our commitment to partner with companies all the way through, from foundation to framework and beyond. That was our intention when we inked our first deal, and it remains in our DNA today.
In some ways, 2008 will always be the most important year in Romulus’ history. It was certainly a transformational year for me — I went from being just a student who overloaded himself on classes to the founder of a venture capital firm with an active portfolio company. I would love for every year going forward to be as transformational.
People often say that the most successful companies experience great change during their journeys, but their DNA — usually rooted in their founding stories — is the constant that bind the teams together. As we enter our second decade, I expect that we will need to continue looking back to seminal 2008 in order to conquer the future.