Matt Gittleman on Private Investing: A Vision Beyond Returns with JHH vc

In the fast-paced world of private investing, Matt Gittleman, the driving force behind JHH vc, shares his transformative journey and sheds light on the vision that propels their success beyond mere economic returns.

Matt Gittleman’s journey into private investing finds its roots in his early career experiences within venture-backed start-ups. According to Gittleman, “The unique challenges these companies faced are where I feel most comfortable and have the most interest.” For him, the role of a venture capitalist is not just a professional engagement; it’s a privilege. He states,

“Being able to learn from these innovative leaders daily is not just a professional engagement; it’s a privilege that continually inspires and motivates me in the realm of private investing.”

What sets your family office apart in the competitive landscape of investors, and how will you use these advantages to achieve your vision for JHH vc?

At JHH vc, we distinguish ourselves from other investors through our commitment to being realistic about our value-add. Our approach is grounded in leveraging our strengths and expertise in fundraising and understanding investor expectations. We focus particularly on the pre-seed to Series A stages, where our insights can be most impactful. Our strategy involves offering candid feedback on investor materials and making targeted introductions to investors whose interests align with our companies’ missions. This specialized support not only aids the companies we invest in but also positions us as a vital connector in the investment ecosystem. We are clear that we can’t help companies in all areas, but where we have a specific perspective we want to go all-in.

What makes an investment opportunity irresistible for JHH vc?

For JHH vc, the allure of an investment opportunity lies in its unique combination of team dynamics, technological innovation, and market potential. We particularly value teams that have a history of successful collaboration, demonstrate coachability by industry experts, and possess a keen ability to identify and address previously unsolvable problems due to technological limitations. Our focus is on ventures where data collection and aggregation serve as catalysts for industry advancement. We’re drawn to companies that not only propose innovative solutions but also have the potential to elevate their respective industries to the next level through technology and data.

‍This blend of team strength, innovative problem-solving, and market transformation potential is what makes an investment opportunity stand out for us.

How would you define portfolio success beyond economic return?

‍While economic return is essential for JHH vc, our definition of success encompasses much more. A key aspect of our success criteria is ensuring the well-being and recognition of the founders and employees within our portfolio companies. We deeply appreciate their sacrifices, from enduring reduced salaries to committing long hours amidst uncertainties, and believe that their proper compensation and care are crucial in any successful venture.

Beyond our portfolio, we are also committed to the growth and health of the DC start-up ecosystem.

This commitment extends through my involvement in initiatives like VC in DC, where we focus on community building and nurturing the entrepreneurial environment .Our investment thesis isn’t just about financial achievements; it’s equally about creating a positive impact on the individuals and communities we interact with, ensuring that our success contributes to a broader, more resilient, and innovative start-up culture.

When it comes to private investing, what would you say is the most significant challenge or pain point that you encounter?

One of the most significant challenges we face at JHH vc in private investing is the complexity that comes with being a generalist investor. Our broad investment scope across various industries means that we often have to compare vastly different opportunities. Each sector has its unique metrics, growth trajectories, and market dynamics, making it challenging to establish a standard benchmark for evaluating potential investments. This necessitates a more nuanced, flexible approach to due diligence and investment decision-making, as we must adapt our evaluation criteria to suit the specific context of each opportunity. Balancing this diversity while maintaining a consistent investment philosophy is a complex yet essential aspect of our strategy.

What are the main risks in the private investing world that your family office is addressing?

‍In private investing at JHH vc, we navigate a nuanced set of challenges. A primary issue is managing the fluctuating nature of deal flow.

While we are consistently inundated with opportunities, identifying truly exciting and viable deals can be sporadic. This inconsistency requires us to be adept at triaging prospects to ensure each receives adequate evaluation.

Conducting thorough due diligence is another significant challenge, especially for our smaller check sizes. Balancing the depth of due diligence with the size of the investment can be a tightrope walk, as it’s crucial to fully under stand the business while also being mindful of resource allocation. The rapid emergence and transformational impact of technologies like generative AI present a unique challenge. Keeping pace with these advancements and discerning what is genuinely novel versus what has quickly become commoditized requires constant vigilance and deep industry understanding.

What has been the primary factor(s) influencing your investment decisions in the past years? How do you think these will evolve over the upcoming years?

Our investment decisions at JHH vc have been influenced by a blend of foresight and foundational principles. Rather than chasing the latest trends at the peak of the Gartner Hype Cycle, we focus on innovations that promise long-lasting change in business practices. Our interest lies in technologies that transform inefficiencies or enable previously impossible outcomes. The quality and adaptability of the founding team are paramount in our decision-making. Given the rapid evolution of start-ups, we prioritize teams capable of navigating and thriving amidst constant change.

Could you share the best investment lesson you’ve learned during your career?

‍‍The most profound investment lesson I’ve learned throughout my career is the importance of recognizing the limits of what you can know about a company. This understanding has underscored the value of partnering with the right people, both on the founder side and among co-investors.

In venture capital, complete certainty is an illusion; thus, the strength and integrity of the people you invest with become paramount.

An additional key lesson is the delicate balance in valuation. Avoiding overpayment for deals is as important as recognizing that exceedingly low valuations often come with hidden drawbacks. A deal that seems ‘too cheap’ often warrants a closer look, as there’s usually a reason for such pricing. Navigating this balance requires a nuanced understanding of the market and a keen eye for both value and potential pitfalls.

Please leave us a book recommendation.

One book that I highly recommend is “Range: Why Generalists Triumph in a Specialized World” by David Epstein. This book resonates deeply with me, both professionally and personally. Epstein makes a compelling case for the value of broad experiences and a diverse skill set, particularly in a world that often prioritizes early specialization. He argues that generalists, with their wide range of experiences and ability to connect disparate ideas, are uniquely positioned to excel and solve complex problems.

In the context of venture capital and private investing, where we deal with a plethora of industries and constantly evolving challenges, the principles outlined in “Range” are particularly relevant. It encourages a more holistic and adaptable approach to learning and problem-solving, which is invaluable in navigating the multifaceted landscapes of business and life.

What’s your favorite non-business interest or hobby?

I love to cook. I actually maintain a personal Instagram account called @mattcooksstuff. Beyond that, spending time with my two boys and wife is at the center of everything I do. Coaching soccer, going camping, and all other things dads get to do with their kids.

What’s your take on the private market overall?

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