Q&A with Patrick Montague: Finding the "Insider Outsider" Founders

For Patrick Montague, venture capital has always been about spotting transformative ideas, building enduring relationships, and staying just a little bit ahead of the curve. 

As a General Partner at GFR Fund, Patrick brings years of experience in early-stage investing, startup operating, and new market expansion to his focus on East Coast US and European investments. But what really drives him? How does he navigate the evolving world of venture capital? And what does he look for in founders who can turn bold visions into reality?

In this candid conversation, Patrick shares the twists and turns of his career, his investment philosophy, and a few unexpected personal insights—including his thoughts on hype cycles in VC, his ‘insider/outsider’ model of great founders, and why he might have been an agent for stand-up comedians in an alternate universe.

Let’s dive in.

Patrick Montague, General Partner at GFR Fund

Can you tell us about your journey into venture capital? What initially drew you to this field?

I began my career in software as a (very junior) growth investor at JMI Equity in Baltimore. It was there, getting exposure to companies like DoubleClick, that I really first internalized the internet as more than just a great place to find cool stuff as a consumer. It was also a massive and growing business and, really, the main driver of some really big societal shifts. I had no idea what those shifts would be but it just felt like an exciting place and not a crazy one in which to build a career (which many of my friends and family still felt in 2006).

But I wanted to better understand how software was actually built, so I took a role in product development at FactSet Research Systems in NYC. Not only did I learn a lot there, working cross-functionally with engineering and sales teams and senior management, but it also ended up being an almost ideal perch from which to observe the chaos of the financial crisis in 2007-2008. While there, I was also involved in the acquisition and integration of a small fintech company called DealMaven, which I suppose is what first gave me the startup bug.

So, with Wall Street and the global economy in turmoil and with recent, close-up exposure to two co-founders exiting their businesses, I decided internet startups were the thing to do. It took me a while, with the economy in collapse, living 3,000 miles from Silicon Valley, and having no real network with entrepreneurs, but, eventually, I landed a gig spearheading New Business Development at Meebo. 

Patrick (left) with the Meebo NYC team

I learned more about business, technology, and people in the next three years at Meebo than probably I had in my entire life up until that point. Far too many lessons to mention, but it was where I began to build some expertise in 1) emerging consumer internet behaviors (especially mobile) and 2) international business expansion (i.e. non-US). It was also when I began shuttling between NYC, San Francisco, and London with increasing frequency. 

After selling Meebo to Google and working with another Sequoia Capital portfolio company, TuneIn, to set up their mobile and international business, I decided venture capital would be a great way to combine my investing, product, and startup operating experiences. By now it was also 2013, and NYC was becoming the real epicenter of East Coast startup activity in the US. So, I went back to school to get my MBA at Columbia and to focus on early-stage venture capital investing in New York City, which is exactly what I ended up doing. 

Patrick (right) at a venture capital competition while attending business school

Well, I’ve been working with GFR for about nine years, and the new title is just the latest iteration of that. But what excites me now is the same as what excited me back in 2016. First off, the team. Starting with Teppei and Yasushi but extending to every additional person as we’ve grown over the years, I’m always struck by the consistent caliber and integrity of my GFR teammates. Secondly, it’s our unique and disciplined approach. I truly believe GFR offers a differentiated perspective, a differentiated investment thesis, and a differentiated [capital + service] product to founders. And we stick to that approach regardless of market cycles. It’s a refreshingly disciplined approach to honing our craft and not getting caught up in temporary fads.  

As is true in many professions, but I think especially true in venture capital, it’s all about building lasting relationships. As mentioned above, I began investing with GFR in 2016. From that era, two of our co-investments, Streem and Facemoji, went on to exit. And GFR backed the founders from both of those teams when they started their next businesses.  

I’d characterize some of the best founders as ‘insider outsiders’ — people with deep domain expertise and intimate knowledge of the problem they’re solving or the community they’re serving. But they also possess something in their background that lets them see things as slightly askew. They see the cracks or fault lines in the status quo and how to best address them. In order to be a successful founder, you simply have to possess a somewhat contrarian, at times even slightly irrational, ‘squeaky wheel’ mentality.

Patrick (right) at a one-on-one session meeting a founder

There is now a clear distinction between what you might call a ‘bulge bracket’ and specialist VCs. Some of the former now manage so much money that they have to ‘create their own weather’ to make even a semi-plausible case for generating the returns their LPs expect from the asset class. By this, I mean generating massive hype cycles around certain categories or new (or not-so-new) technologies.

GFR is a specialized, somewhat niche, ‘boutique’ provider of venture capital but the scale of money being injected into the ecosystem distorts the market in all kinds of unpredictable ways. We do our best at GFR to ‘stick to our knitting,’ to stay disciplined, and to avoid the noise of the hype cycles. 

It’s almost hard to imagine, given how long I’ve been focused on VC. What’s another profession that would expose me so regularly to slightly crazy, completely inspiring people? Maybe something in international development. Or perhaps being an agent/producer for stand-up comedians.  

I’d like to get back into a more regular habit of practicing creativity – sketching, painting, origami. These are all dormant hobbies of mine, so maybe this blog can serve to resuscitate them. Keep me honest, internet!

Portrait of Johns Hopkins, artwork created by Patrick during college using beer cans, paint, and wood

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