What Prebys Ventures Looks for in San Diego Founders featuring Mike Krenn

How do you approach an investment fund that is focused on proving you can invest locally and beat public market returns? Find out today. Welcome to The Connect Current, the flow of innovation in San Diego. We bring you the founders, investors, and leaders building the future across life science, tech, climate, defense, AI, and more. This is where San Diego's next chapter takes shape. Welcome to The Connect Current, the flow of innovation in San Diego. I'm your host, James Zanewicz, and this episode is being recorded at Kiln in Rancho Bernardo. If you're looking for a coworking space, look no further than Kiln, and we want to thank them for that support. Today, I'm really excited to be joined by Mike Crenn, the managing director of Prebys Ventures. Mike has been one of the most recognizable champions of San Diego's innovation ecosystem for decades. He previously led the San Diego Venture Group, served as CEO of CONNECT after the merger of the SDVG and CONNECT, founded what became New Fund and Evo Nexus, and has helped connect founders, investors, and regional partners across San Diego's startup community. But now, through Prebys Ventures, he's leading a new effort focused on investing in San Diego's innovation economy. The Prebys Ventures Impact Fund was launched by the Prebys Foundation as a $50 million venture fund designed to fuel innovation and economic growth in San Diego. This is a great CONNECT Current conversation I'm excited about this conversation because it gets directly to something founders always want to understand: what investors are really looking for, how they evaluate companies, and how entrepreneurs can tell a sharper story when they are raising capital. Mike, welcome to the show.

Woo-hoo! Thanks for having me. Thanks for having me. It's great to be here.

I know, it's so much fun to talk about this. And, you know, I think most people have heard the Prebys name in San Diego, but they may not know about Prebys Ventures. What is Prebys Ventures?

Yeah, so credit to the leadership at Prebys and the board. They carved out $50 million to launch a venture fund. So it's a $50 million fund focused only on San Diego. That's one part of it that's very unique. And then the second unique factor is I'm doing it with no carry. So all of the returns generated go right back into the fund and the foundation to be reinvested back into San Diego. So the idea is we turn $50 into $150 into $400, and long after I'm gone, there's a billion-dollar fund given back to San Diego.

And so what role do you want it to play in the innovation economy? What do you see it accomplishing?

Yeah, I, I, so one, I think having a strong economic foundation for the region benefits all San Diegans. It's expensive to live here and having good high-paying jobs of quality is important to the future of the region. So that's one. Second thing is, this goes back to what CONNECT does and our days of working together and being a source to help attract other capital to the region, I think is really important. We're not gonna do it by ourselves, so if we can be a part of the machine that helps attract other investors to park their money into San Diego companies, that's going to benefit the economy long-term.

Is there something different between how you operate and how a traditional investment fund operates?

Yeah, I think so. I mean, I think we're a friendlier fund in some respects.

That's because you're there.

You're Fund Mike. No, it's good people. I mean, especially for Fund 1, yeah, I think so. I mean, part of this mission, I've taken a long-term view of this thing, is like I say, to attract other capital to the region too. And so part of that is in built into the strategy. So I'm trying to get into deals with other high-quality investors so that we can build those relationships so we can syndicate deals in the future. And building that brand I think will be important for future efforts to again further help attract more dollars to San Diego.

Yeah. So when you look at investments, kind of switching to The companies you're looking to invest in, what kinds of companies, sectors, or opportunities are most aligned with Prebys Ventures?

Yeah, so that's one of the fun things is we are industry agnostic. So I will, I have the privilege to invest in just about anything, and I'm a believer that San Diego is better off if it's got a very broad-based economy. So we're looking at everything from blue tech, green tech, fintech, health tech, med tech, you pick the techs, life sciences as well too. So we're looking at everything and anything.

So don't just look at kind of the areas that the Prebys Foundation's doing grants in because you're much broader in where you invest.

Correct. I mean, the Prebys Foundation is a special foundation. They, they give away, they give away $70 million to San Diego last year across a bunch of different areas. Medical research is one of the areas that's very important to them. But one of the things that I really like is my history has been just so focused on the San Diego innovation economy, and now I'm a part of something bigger. So they're giving back to arts, healthcare, they're doing education, workforce development. And all of that, it's just, all of it is designed to make San Diego better for future generations.

Are there any particular stages of companies that you're looking at or types of business models? You're open to all sectors, but is there any sweet spot in that for you?

CBD? No, I mean, it's, it's, I'm laughing 'cause it's funny 'cause I've done a Series C, I've done a Series B, I've done A, and just recently closed a seed round. So we've done a little bit of everything.

So basically the Prebys Fund is the lawyer of venture funds where it depends.

Yeah, sort of. Yeah. We're looking to get into good deals.

Good deals.

Yeah. Oh, very cool.

Very cool. So when you're looking at a company, what makes it investable to you? Is it founder support, venture networks? Have they worked with Connect? What makes them an investable company to you?

Of course they should work with Connect. I mean, that's a given, but I think it's different for every company. I mean, you're looking for people that are smarter than me, which is a reasonably low bar, but really good teams that have a big opportunity. And then you believe that they're the group that can pull it off in the end because there's gonna be obstacles along the way. And, you know, you want to— you have people that, that will get it there and over the hump.

Are there any, any indications that, you know, a company may be too early for you? Because there probably is a too early.

For us, for sure. But there's different investors for different companies, right? So, you know, I encourage people to do their homework and to try and find the right investors for their particular company at the stage they're at, because I see far too often people wasting cycles and taking meetings. And then there's a second meeting, a third meeting with an investor that's never really going to pull the trigger. And you could have been spending that time focused on building the business, I think, at the end of the day. So it's a process. Yeah.

So, so for founders who are super early, who are in that, that friends, family, and fools or that pre-seed, it's great to come up to you and get to know you at a cocktail reception, but you're not the person to be pitching at that moment, more likely.

Yeah, like I said, I think it's a process. I think there's— it's— and people, entrepreneurs are Type A people by definition, right? So they're always trying to raise money all the time as fast as they can. And I think you gotta look at it as a long-term strategy and you're having some conversations with investors, digesting that info, adjusting the deck. And like I say, all the time trying to put together your list of getting to the right investors.

And it's not just having the right list, it's going to 'em at the right time in the right cycle so that you're putting your best foot forward and increasing your chances of And so digging into founders a little more on the personal, personal, kind of the personal interpersonal realm, when a founder first gets in front of you, what are you trying to understand about them as an individual, about their team, as how they function and their ability to work together to execute?

Yeah, that's a very individualized sort of personality kind of thing. I feel like you can kind of tell when you're talking to people, one, they're not BSing you and they're not, you know, Using generic figures of whatever, 20% growth. I mean, that's turning $1 into $1.20. So you got— You gotta use real numbers and be willing to share where you don't wanna talk about the negatives or the gaps or the obstacles, but certainly the investors are thinking of that stuff and you gotta be ready to answer it in ways that seem reasonable and acknowledge it. And then you've got your, you mentioned the team. The team's super important, right? You want people that have different skill sets that blend together to help get you to the objectives you need to get to in the near term and the long term.

Are there green flags that give you confidence early on or red flags that give you pause in individuals or teams?

For us, this might be specific to us, but it's because we're so San Diego-centric. But, you know, green flags are we know a lot of people in San Diego, and if you're surrounded by good people that we like that add credibility to the company and the deal, that's always very helpful.

And so basically, if you're from outside San Diego, that's a red flag for you.

That is an easy switch for me to pull. So I kind of like that. Yeah.

And so does a company— if a company moves here, they're still eligible?

100%.

Nice. So for entrepreneurs listening to this and they're trying to learn how to approach you because they want to raise capital and they're in the right spot, you know, they're in that ABC, they've got something compelling.

They should call you.

Good strong team, should call and work through us first so that we can introduce you. But say we've made that— it was like, yes, you should get to know Mike. We make that intro. What should their first conversation or pitch to you look like, and what should they be ready to clearly explain to you?

Uh, I always love getting a deck for sure. But even outside of that, I've had a lot of conversations with people where I knew we weren't going to invest, where you're just trying to be helpful. I think that's an important process for any entrepreneur to have those conversations with other people as well too that can add value. But if you're pitching us, if you're coming to us for a potential check, yeah, it's a deck. It's being buttoned up, having a business that's ready to execute. You want to know that the team's in place and that, like I say, you've got a big market, you've got a thoughtful, intelligent technical solution that is better than anything else on the market. And then I want to know that you're the guys that are going to be able to execute on it and take it over the finish line.

So when you— when we say deck, sometimes people think, oh, 50, 60 slides, sometimes it's like 3. What's your sweet spot of like, here's a reasonable amount of slides to convey the information? You should be able to do it in X.

So I'm glad you asked that question because I I have a strong opinion on this.

You have a strong opinion? I'm shocked. I'm shocked, Mike.

Well, I feel like a lot of entrepreneurs get counseled to do something really short, and I feel like people sell themselves short by trying to cram too much into a tiny little exec summary or a tiny deck. And people who read a lot of decks, like any VC, we can read a deck in 5 minutes, whether it's 5 pages or 20 pages. We're gonna flip through it, get to the meat we want, and then if it looks interesting, we'll dig in further and we'll go through the entire deck and get educated on it. 2 things. One, don't sell yourself short by trying to condense pages, and then your pages get super busy as well too. So it's all text and you wanna put all the elements in there that investors care about. So have it in there. If you need to do backup slides, you can put that in there too. Yeah.

'Cause you can have a 7-slide deck and then have 10 after it that you can flip to, which gets the information there.

Yeah. I get 20-page decks all the time and I'm totally fine with it. Yeah.

But 50, 60, you're out.

That's a lot. That's a lot. 50, 60 is a lot.

All right. So if they do only have a few minutes, say, you know, this is their elevator pitch to you, or they catch you at something and they've got a few moments to get your attention, what do they need to convey in that short time to get you to say, hey, I will read your deck when you send it over?

Yeah, elevator pitch. That's another thing of mine. So I'm a firm believer of elevator pitches. It depends on who you're in the elevator with. So if I'm a— if I'm a life science investor, I want to hear about your science. If it's a software company, I want to know about your market traction. You want to give me the one piece of data that makes me want to learn more so that there's a follow-up conversation.

Nice. And that, that is audience-specific. I like that a lot. And so, A, know the industry you're selling to, and B, know what they care about.

Yeah, the stage of— if it's a seed investor, if it's a growth stage investor, maybe who they know, you can throw out a name. It just depends.

Where have you seen founders most often lose momentum when they're trying to raise money? And are there things they should do differently before they walk into that investor conversation?

Yeah, that's a good question. I see a lot of investors going out too fast and furious. And I, again, I get it. People are trying to raise money to build the business. You know, I see lots of spreadsheets that have 30, 60, 100 venture capital firm names on it, and they'll just go haphazard and go crash indoors. Right. And even a lot of companies, this is a lot of people will tell me, a lot of investors will say to entrepreneurs that I like to get to know entrepreneurs 6 months ahead of time so I can build a relationship or a year ahead of time and follow them and blah, blah, blah. There's some truth to that. There's a lot of BS to that too. If you are a really good company and you're nailing your numbers and your growth metrics look strong, an investor's gonna get up to speed on you really, really quickly. Yep.

So, 'cause they're gonna wanna beat the other people in, right?

Yeah. But I do think it's helpful to have a few of those conversations going and be active at any time, especially if they're a friendly type of VC and, and you can get feedback from them. So I will say, Have 3 or 4 or maybe 6 ongoing conversations with investors going on. But meanwhile, you've got your, the, your dream VCs, your tier A group. Keep them in the background and use your early meetings to hone your deck, hone your pitch, understand what the objections are, get better at it. And then when you're ready to really put your foot forward, that's when you go out to your grade A targets.

And people always talk about the need for the warm intro. Are— is Prebus open to kind of cold solicitation as well? Is it better to always approach through somebody where you can be like, okay, they've been vetted and now I know I should talk to them?

Yeah. I mean, this goes back to our Connect days, right? I mean, we do the cool companies thing and it's always nice to get a warm introduction for sure. There is the occasional cold email that you get that it looks really interesting and you'll give them a meeting. But certainly warm introductions are definitely better.

So you're saying they need to get to know Kiana Marshall, me, Trey, Gretel, feature of the team. And then if we send you a note, you're more likely to actually look at that.

Yeah, I mean, it's bigger than that, right? You guys have a huge network. You know how to time these things. You know what VCs are looking for in different sectors. And it might not be me that you send them to first. Plus they're getting free advice. It doesn't cost anything. It's a great service and people should use it and work with you guys and strategize about how to do all of this stuff that we're talking about.

So in addition to, of course, talking to Connect and the team, what's the one thing a founder can do this week to make themselves more prepared for capital conversations, whether that's with Prebus Ventures or any other investor or venture fund? Because you have a long career in this. You've run super early stage, doing later stage investments. What is something they can start to do to prepare themselves?

Build the business at the end of the day.

Yeah. Focus on that business, right?

Yeah. I mean, we get that a lot, right? Build the business and it'll take care of itself.

Is there anything else about Prebys Ventures that you feel like people should know?

Yeah, yeah, there is something interesting there too. And this is maybe for other investors and foundations, but our mission, we're different in that we're trying to prove that you can invest dollars locally as a foundation instead of into large public companies and public indexes. So you're investing solely in private companies. And if we can beat, if we can beat those public market returns, which we fully intend to do, by the way, we've done a completely different model that's never been done before. And that, that excites me. And I think that could be good for other communities as well too. And we're going to do it.

Well, and San Diego is the birthplace of lots of things like this, you know, the birthplace of accelerators before it was a word, intentional ecosystems. Why not be the birthplace of like public service venture funds, which is pretty incredible, focused on the community. Anything else about San Diego you think people should know? Because you are like Mr. San Diego. People say this. What do you feel like people should know about our region?

From people outside the— I mean, it's, it's San Diego is a better place, right? At the end of the day, I grew up in Silicon Valley and I don't enjoy it. Everybody, I go up there and people gotta tell me how smart they are in the first 30 seconds of a conversation and it's annoying.

And here they wanna know where you surfed or had dinner or cocktails or coffee or—

Yeah, yeah. They're more genuine conversations. I mean, the life sciences community, as you know, is super tight. Everybody's collaborative. Everybody shares information. Tech community is that way as well too. There's a little bit of everything here. You know, I was looking at the funding data and there's companies that are in clean tech getting funded and fintech getting funded. There's life science therapeutics companies getting funded. There's a real good spread. And I think it's just a very healthy community in which to grow your business. And the surf thing always cracks me up because you can tell if you look at people and decks and if they're out surfing all the time, it's a filter. You don't work, you know, you don't chase them. And there's a lot of people here that work really hard and they go out surfing.

And you can do both.

Yeah, you can absolutely do both. Little work-life balance. All right.

And so our, our last question for every guest is always our very Connect Current question. What drives your innovative flow? What gets your juices flowing?

Yeah, I've been committed to trying to make San Diego better for the masses for a very long time, and that remains it. So, you know, there's so many different people here that are doing good to build this community, and there's so many folks that I think fly under the radar. And, you know, you look at social media and it's all these people that are looking to get street cred for themselves or get a few more followers. And there's so many good people here that are doing the hard work that are making our community better. And I would love to see those people get a hell of a lot more support.

Those are a lot of the people that we're featuring on this podcast. Good words.

I love it.

It's great for that because that helps get them the amplification. But then we also have folks like you so they understand how to approach you and can become more successful. And this is what the Connect Current is all about. I love that, Mike. And obviously, I think you look at where San Diego is versus where it was when you got here, and you've had a tremendous impact.

Yeah, a lot of people, good people.

All right, well, I wanna thank you. This was an incredible conversation for our founders and a great reminder. I think that capital is about more than funding. It's about fit, trust, timing, and the ability to show why your company is ready for that next stage. And Prebus Ventures adds that really incredible and important new layer to our innovation economy. Your perspective will help founders better understand how to approach your opportunities with focus and confidence, and really appreciate you joining us.

Send your companies to Connect.

We did not pay him to say that, and no AI was used in this podcast. That's not true. Probably— we probably did the questions with AI, didn't we, Trey? Trey's like nodding and laughing. One day we'll get him on mic with us. Well, thanks again, Micah.

Appreciate your time. Keep doing what you do.

Thanks for listening to The Connect Current. If you want to learn more about Connect and explore resources across San Diego's innovation ecosystem, Follow us on LinkedIn or visit connect.org. We'll see you next time on The Connect Current, where San Diego's innovation story keeps moving forward.

This podcast was edited and produced by Resonate Recordings.