VCs Jonathan Triest and Brett Demarais see their ability to understand people and build long-term relationships with founders as the primary reason for their Detroit-based venture firm, Ludlow Venturescelebrating its 15th year in business.
It seems silly, attributing their longevity to what’s sometimes called “Midwestern nice.” But is it crazy? Maybe not. Before Ludlow, neither Triest nor DeMarres had much operating experience. They also had no investing experience. Triest was fresh out of school when he first set up the firm in 2009. When DeMarres joined them three years later, it was after finishing his first job, running a wedding videography outfit.
Fast forward, Ludlow today has $250 million in assets under management, including a new $50 million fifth fund that the pair recently closed with commitments from billionaire Dan Gilbert, financial services company Northern Trust, Israel-based venture firm Vintage Investments, and fund-of-funds outfit StepStone, which piloted the new vehicle.
It’s hard to know for sure what Ludlow offered at the beginning other than a lot of heart and good instincts to the people he met. In 2012, for example, during a trip to Los Angeles, Triest and DeMarres met entrepreneurs Ryan Hudson and George Ruan about a Chrome extension that helps customers secure deals. The young investors had trouble getting excited about what the founders were building. But “George and Ryan were great,” Triest told me during a phone conversation at a networking event in Detroit, an announcer’s voice blaring in the background.
Ludlow wrote one of the first checks to Hudson and Ruan, who soon went more public with their shopping and rewards platform called Honey. In 2020, when Honey sold to PayPal for $1.5 billion $4 billion In a mostly cash deal, that payment produced a return more than six times that of the $15 million the Ludlow fund from which it was invested.
“I tend to see my peers as ‘outperforming’ themselves, when in reality, you can only see the people,” says Triest. “Our biggest mistakes were when we invested in verticals or ideas we loved but the people weren’t exceptional.”
Of course, investing in people is nothing new. Most VCs claim to do just that. Ludlow Ventures had a bit of luck early on. Tryst started its $15 million seed fund with a $1 million loan from friends and family. Not everyone can get that kind of seed money.
But even luck doesn’t keep a business afloat for that long — and certainly not in a market that has grown comparatively harsh as institutional investors in particular have lost patience with new outfits. While General Catalyst, Kleiner Perkins and other veteran venture firms are shutting down Billions In capital commitments, new companies are moving fast pulling the plug At present this is not happening due to lack of interest from investors.
Indeed, when Triest talks about relationships, he argues strongly that he means business. Ludlow has maintained such a strong relationship with Hudson that earlier this year, the venture firm wrote a check for $3 million in a $5 million round for Hudson’s newest, still-secret startup, even though Hudson “could have had anybody lead that round—it was so full of top VCs,” Triest says.
(Trieste also noted that Hudson is married to another founder Ludlow has backed, Lumi founder Jesse Jennett. He also admitted he can’t take credit for the match; it surprised him after they began dating.)
As far as other differentiators go, Tryst avoids them. The firm has no geographic focus. It has no sector focus. As far as its marketing goes, it relied largely on a video series called “Carpool VC” which Triest and DeMarres once randomly posted to YouTube, in which the two shared silly unscripted banter while smiling at another, better-known VC through a car speakerphone.
Triest, whose oldest child is 15, says the shows, recorded mostly in 2015 and 2016, haunt his kids now. They also served their purpose, he added, adding that he’s still surprised by “how often people get on a call with us, and they feel like they know us a little bit,” In fact, he added, “a lot of people have opted out, saying they don’t want to work with clowns like us. But a lot of people choose to be involved.”
Clearly. Ludlow, which invests in about 25 companies with each fund, has funded hundreds of startups over time, some of which have gone to zero, while others have been significantly marked down since the firm funded them.
Flex, a flexible payments platform that currently promises to break down one’s monthly rent into smaller instalments and has plans for other verticals, has raised $100 million. $20 million The $100 million funding was accompanied by another $100 million in debt financing in the autumn of last year. (A rival startup, Circa, was recently acquired for $100 million. $9.5 million (Cash amount and shares of the loyalty company purchasing it)
Ludlow is also an investor in workplace analytics company Density, which was valued at $1 billion When it last raised a round in 2021; Caption, a video editing app that raised $25 million in Series B funding last year; Notarize, an online notary network valued at $760 million by investors last year; and Backbone, a startup that turns the iPhone into a gaming device and which raised funding $40 million In Series A funding in 2022.
When asked about the unifying thread across the wider companies, Triest again turns to the murky stuff. “The thread across our whole portfolio is that the people who founded them are people we want to spend time with, who make us want to leave Ludlow to work with them. We have to believe that what they’re working on is viable, but it doesn’t necessarily mean that it’s the thing.”
Don’t all VCs say the same thing? “I don’t like all this ‘founder-friendly’ talk” that other VCs espouse, responds Triest. “There’s no truth behind it.”
At Ludlow, they say, “If we won’t stand up [a founder’s] We have failed in marriage.”
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