Full Transcript

Jason Kirby: Everyone, welcome back to Fundraising Demystified. Today I have Mark Peter Davis, also known as MPD, Managing Partner at Interplay. Welcome to the show, Mark. I’ve been running this podcast for over a year—you’re my business partner and an investor in Thunder—so it’s about time we bring you on. You’ve got an incredible background.

MPD: Hey, thanks for having me.

MPD: Here’s the awkward thing: I’ve been liking every post you put on LinkedIn. Do I do that on my own episode, or is that weird?

Jason Kirby: As you should. Then you comment and say, “Wow, that guy looks great.” For listeners not familiar with Interplay or your background—and the fact that you wrote the book on fundraising—let’s jump in. You’ve invested in companies like Warby Parker and Coinbase, but Interplay is more than a typical VC fund. What is Interplay and why did you start it?

MPD: At the risk of sounding a little cheesy, here’s the real version. Interplay is a mission-driven, for-profit startup ecosystem, centered on the belief that entrepreneurs are the primary drivers of social change. We’ve dedicated our careers to helping founders drive change. We don’t presume to know exactly what needs to be changed—we try to enable and unlock founders.

MPD: We’ve got four dimensions that serve this concept. First, we have a Series A venture fund focused on North American B2B software. Second, an incubator where we support seed-stage companies—typically small teams that have raised some capital—working with them for about six months to help them win. Third, a foundry (think venture studio) where we start companies from scratch—these days three to six per year—filling voids where a sustainable, for-profit solution can improve society. Fourth, Ascend Interplay, a multifamily office for ultra-high-net-worth families, often entrepreneurial, to manage their estates after a big outcome.

MPD: The way this dovetails into the mission: I believe the highest-yield investments often create the most social value. If you improve society, you make more money. For example, a plain real-estate fund might do 15% net IRR, while one that renovates, improves tenant lives, and pays down debt might do 22–25% net IRR. Channeling capital to capable hands can both improve society and generate wealth.

MPD: We’re building with longevity, so we’re obsessed with quality over quantity. We don’t manage the largest funds, but we aim to be top-performing. Our incubator works with few companies, very hands-on, targeting a 100% success mindset—same with the foundry. We do fewer companies than we could, but the hit rate should be higher. Everything is tooled for enduring quality.

Jason Kirby: I’ve heard this a few times and it’s refreshing to hear the whole flywheel: from foundry to raising the next round, to exit, to the family office. One thing I notice about you: you focus on alignment and long-term relationships. It’s no fun being in business with people you don’t like. That quality lens feels aligned, which is why our partnership works. Interplay’s ecosystem is massive—across all the employees under the umbrella and multiple exits. You talked about where you’re taking it, but not as much about the successes. What wins stand out?

MPD: We’re 13 years in, and it takes 10 years to have an overnight success in venture. We now have wins across every part of the business. Earlier investments have had more time to mature—before our first outside fund we backed Warby Parker, Coinbase, Course Hero. Since then we’ve made around 75 investments from our venture product, ~8–12 per year, and historically about 20% become breakout companies.

MPD: On the incubator side, we recently took in some outside capital and ran the numbers—it looks like a top 5–10% performing venture fund. We’ve had several exits; notably, Jackpocket, one of our first incubations, sold to DraftKings for $750M. The team there did the work—Pete Sullivan is a beast.

MPD: On the foundry, we’ve started just shy of 20 companies. The first 11 were services for startups—insurance, marketing, leadership training, accounting/tax/CFO, software dev & design, BPO, law, capital raising (shoutout Thunder). We’ve sold five of the 11, including Founders Shield to Baldwin Risk Partners and DevSpark (Spark Digital) to Intive. Many of those were revenue-funded—bootstrapped by design—while newer foundry companies have raised capital from major venture firms. For each idea, we reverse-engineer the right solution and the right financing strategy. Venture capital is not for everybody.

Jason Kirby: Let’s talk about that. You wrote The Fundraising Rules, which helps founders decide how to raise. What principles still apply, and what’s different now?

MPD: If you’re not raising capital, it’s the worst book to read—boring. But if you are, it’s useful. I started in VC in 2006 and learned via apprenticeship. What frustrated me as a VC was founders pitching in “entrepreneur” language, not “VC” language—same concepts, different framing. I started blogging three times a week for five years about the chronological process of raising capital, to illuminate the VC side so founders could present their best version. That became the book around 2010–2011.

MPD: The book reads like a Boy Scout handbook—use the detailed TOC, jump to where you are in the process. Before the raise, I cover materials needed, but the most important insight is whether you should raise at all. There’s a two-by-two framework (taught in some business schools) that helps decide if you should bootstrap, raise from angels/family offices, or go the VC route for subsequent rounds. It’s an objective call.

MPD: Get that decision wrong and you can destroy founder returns—or lose the race by undercapitalizing. The book walks through scenarios and horror stories of misalignment. Every business has a fingerprint; match the financing to it.

Jason Kirby: I often stop founders from pursuing a channel that doesn’t fit. Venture has gone mainstream and feels like validation, so some chase VC instead of customers and revenue—which leads to dismal outcomes. If you haven’t started raising, your book is a good start, but first ask if you qualify and want the strings that come with VC.

MPD: I’d go further: most companies shouldn’t raise VC. If you’ve put VC on a pedestal because it correlates with the biggest outcomes, that doesn’t mean it’s best for your business. Be open-minded. And sometimes the right move is to not build the company at all.

Jason Kirby: Like pet dating apps. Founders need exposure to their options. Stats-wise, around 150k companies seek capital annually, but only ~4k receive venture capital. The odds aren’t in your favor.

MPD: And some of those companies shouldn’t exist, while others are great businesses that VC would hurt. It’s alignment. I remember an angel who owned a $5M revenue business at 80% EBITDA. In the VC lens that looks tiny, but he owned it all—and he drove a Maserati. Success comes in different forms.

Jason Kirby: The Maserati as success metric—that’s a new one. Point is: know what’s on the table for you. Looking at the industry and venture, decide if that’s your path. Switching gears: you advise companies across bootstrapped, VC, and PE—and you also raise for your fund. How is raising as a founder different from raising as a GP?

MPD: It’s similar, but venture fundraising is a longer courtship and a multifund relationship. It’s about communicating clearly, real strategy, honesty, realism, transparency—partnership fundamentals. Partnerships are hard; I’ve learned a lot over 20 years and I’m still learning. Over-communicate; relationships are the glue of building in groups.

Jason Kirby: I see that. Raising for a fund can be even more competitive for allocation. You can’t show MoM growth like a startup. Putting on your VC hat: for Interplay’s Series A fund, what do you look for? What signals a breakout?

MPD: We go in thinking every investment can be a breakout—we’re right ~20% of the time. Our portfolio has an unusually high concentration of outcomes because we invest in companies with real economic engines at the time of investment: strong revenue and growth, healthy gross margins, clear LTV/CAC, default-alive unit economics, large quantifiable market, tier-one team and co-investors. We underwrite to 10x, but if growth is slower than modeled, the wheels don’t fall off—we still get outcomes. We invest in math.

Jason Kirby: How do founders break through to your team? What’s the relationship lifecycle—fast or years-long?

MPD: It varies by firm, but for us, we can invest quickly when we see our heuristics. New relationships are fine. Founders can come in via interplay.vc/engage; we have everyone fill the form so we get a full dataset and don’t waste anyone’s time. We often join rounds behind a lead (we don’t lead or take board seats), writing a larger follower check and being a hands-on consigliere. Because we’re not in board seats, we can diligence faster—often committing pending lead terms and introducing founders to lead investors we trust.

Jason Kirby: What’s your diligence “secret sauce”? What influences the decision?

MPD: From my M&A diligence background, two big things. First, identify the few factors most likely to kill the deal and go deep there first—saves time. Second, talk to people who are living the problem. Call a ton of customers until you reach the true experts who know the product and market inside out. That reveals the human dimension you can’t see in academic studies—sometimes the irrational behavior that kills adoption, like a buyer preferring golf over upgrading software.

Jason Kirby: Validating beyond slides—founders should welcome that. From an LP view it shows you do the work; from a founder view it shows commitment to learning. Give them the references and let them call.

MPD: And we learn insights that help founders later. The academic view usually checks out, but the human layer is key.

Jason Kirby: As we wrap, what’s your parting advice for founders actively raising venture capital?

MPD: I’ve packaged most of my content—grab the book The Fundraising Rules on Amazon and a companion talk on MPD.me under Talks. If the book is how to play chess, the talk is how to get to checkmate—how to create FOMO, signal correctly, and move VCs. But my core advice isn’t about fundraising: build a great company. Match the capital strategy to your business, then execute the dance—the tactics are learnable. Your outcome should map to how great the business is. Raising capital is just buying flour—you still have to bake the cake.

Jason Kirby: Well said. Focus on building a great company and you’ll attract capital—or be profitable and grow anyway. Mark, it’s been great finally having you on.

MPD: You.

Jason Kirby: We’ll link the book, your marketing talk, and the presentation in the show notes. For people who want to reach out, what’s the best way?

MPD: Twitter and LinkedIn work. Interplay is an open door—go to interplay.vc, click the big red Engage button, submit, and you’ll connect with the right folks. It’s a real door, not a dead end.

Jason Kirby: It’s well designed—rare among firms. Awesome, Mark. Thanks for joining. Looking forward to getting this out to our audience.

MPD: Thanks, Jason.