Spotlight On: Jeff Ransdell, Founding Partner & Managing Director, Fuel Venture Capital
November 2024 — In an interview with Invest:, Jeff Ransdell, founding partner and managing director of Fuel Venture Capital, discussed navigating the 2021 bear market, Miami’s role in the creative economy, and the importance of financial education and innovation in venture capital.
Reflecting on the past year, what has been most significant for Fuel Venture Capital?
We faced the first bear market for over a decade, starting in 2021. This was a significant challenge, not just for us but also for the portfolio companies we support. Before 2021, the mindset for founders and investors was to “grow at all costs.” Money was thrown at growth without focusing on profitability. When the bear market hit, we had to adapt quickly.
With my background in public markets and my partner Maggie Vo, our CIO, and former hedge fund manager, our strength lies in operational excellence. I often tell investors that, despite the immense challenges, the bear market was the best thing that could have happened. It allowed us to sit down with our portfolio companies and have strategic conversations about transitioning to profitability, making them more attractive to investors.
Our biggest challenge has been adjusting internal strategies, reducing burn rates, and making data-driven investments. Meanwhile, it’s been tough to find investors willing to back risky assets like venture capital. In my 32 years, the past three have been the hardest of my career. My team and I have worked 80 to 110 hours a week, seven days a week, without vacation for years. Despite these challenges, our companies are thriving, with many on the verge of M&A or IPOs. The hard work has paid off, and that’s incredibly rewarding.
How would you describe the current macroeconomic environment?
The 2021 bear market still shapes the current macroeconomic environment, the first the private sector has truly faced. The fintech winter hit hard — unicorns once worth billions are now valued at $300-$400 million. Valuations dropped, capital flow slowed, and cap table adjustments became common. Pay-to-play rounds surged, where non-participants faced dilution. It’s been like a war, with new challenges daily to help our portfolio companies navigate.
Historic high interest rates are affecting how consumers and investors spend. Treasury bills and bonds offer 5-5.5% returns with no risk, making it tough to attract investment in riskier ventures like startups. The demanding macroeconomic conditions haven’t improved yet.
What fundamentals do you believe make this region the ideal place for your business?
It came down to a few key factors. First, my background — I was one of six executives running Merrill Lynch’s global wealth business, with P&L responsibilities across Florida, Alabama, Georgia, Latin America, and the Caribbean. I left because I felt the world was moving faster than the firm and wanted to act. So, I started Fuel Venture Capital in Miami.
With my experience in Latin America and the Caribbean, I believed U.S. companies would increasingly look south for growth. Miami’s unique connection to Latin America made it the perfect base. Having lived here for 23 years, I often say Miami feels close to the U.S. but isn’t — it’s truly international.
If I were starting a venture capital firm from scratch, why go to Silicon Valley, which is dominated by incumbents? Instead, I chose Miami, a city I know well, where I understand the market. It worked — 55% of our limited partners are non-U.S. citizens, mostly from Latin America. We’re now the VC firm of choice for Latin America, especially in the creative economy.
Miami’s diversity fosters creativity, making it the perfect place to build something lasting. Why build anywhere else when Miami is paradise, even when it rains?
What role do you think Miami is playing in shaping the broader tech ecosystem, particularly in sectors like fintech, AI, and the creative economy?
During the Startup World Cup, I learned that the City of Miami is now offering $25,000 rent subsidies for downtown startups. It’s a great initiative, but it comes after what I see as a missed opportunity. In 2020, when Mayor Francis Suarez tweeted “How can I help?” and Florida’s policies attracted many people, Miami had a massive chance to grow its startup ecosystem. However, the community didn’t fully rally behind it, which I think was a mistake.
Fuel Venture Capital has deployed $550 million globally, heading to $700 million, with $200 million in South Florida. The companies we’ve invested in here employ about 500 people who moved to Miami, generating $50 million in annual local spending. Despite this impact, only $20 million of our $550 million AUM comes from Miami, highlighting a disconnect.
To capitalize on this opportunity, Miami’s community needs to get more involved, just like Silicon Valley, where locals invest in startups and provide the capital for growth. Without that support, companies will go elsewhere to places like Austin or Kansas City, with more robust ecosystems.
We’re early in Miami’s tech ecosystem lifecycle — though we launched in 2017, real opportunities began in 2020-2021. While we’ve seen success, with several companies on the verge of exiting next year, there’s still a long way to go. As more success stories emerge, I believe the local community will realize the value of getting involved. It’s early, but the potential is there if the community steps up.
How do you balance the need for innovation with managing risks?
The concept of managing risk is central to everything we do, which is why I brought Maggie Vo on as our Chief Investment Officer. As a former hedge fund manager, risk management is in her DNA. Hedge fund managers are trained to hedge investments, and we’ve applied that mindset to the creative economy.
I wanted to introduce more institutional discipline to venture capital, where most investors take a fluid approach. We focus on risk management using structured principles, like ensuring our portfolio has at least 25 companies, so if a few underperform, the entire fund isn’t affected.
In portfolio management, there’s the “rule of thirds”: a third of investments go to zero, a third break even, and a third are winners. We aim to outperform this model, and so far, we’ve succeeded. Despite challenges like COVID and the bear market, we’ve only lost three companies, which is rare in our industry.
Managing risk is essential, especially in a world that’s moving faster than ever. People need to adjust how they think about their investments because the strategies that worked 10 or even five years ago won’t necessarily hold up in today’s fast-paced, tech-driven world. We’ve been working hard to educate our investors about this, especially since the public markets, while at all-time highs, are driven by just a handful of tech companies. The broader market isn’t growing, and investors need to diversify into sectors like the creative economy.
Looking ahead, what do you believe are the most important factors that will shape the venture capital industry in the next decade?
The creative economy will continue to grow in demand. Fuel Venture Capital was created to provide individuals access to the creative economy, which, until now, has primarily been the domain of large institutions, insurance companies, and endowments. For the past 25 years, these big players have had exclusive access to this space. One reason I started Fuel in Miami was to give everyday people the same opportunity.
Hardworking families often lack access to investment opportunities through firms like Bank of America, Merrill Lynch, or Morgan Stanley, which still operate under what I believe is an outdated model. Technology has democratized information, allowing individuals to research and discover firms like Fuel Venture Capital, which provide access to the creative economy, just as large institutions have been doing.
This trend will only strengthen over time. The creative economy is poised to become more dominant because, in the end, all U.S. GDP growth will come from technology — period. Especially over the next four to five years, with advancements in AI and other technologies, it will integrate even more into our daily lives. I believe that in five years, we may wake up and not recognize much of the world around us — it’s going to be that transformative.
Right now, Fuel is still in the early stages, at least in our area. We might be in the first quarter of the game, economically speaking, but the broader economy is already in the third quarter, about to enter the fourth. Our goal is to become more well-known and trusted while continuing to educate individuals who don’t yet understand the importance of investing in the creative economy.
Being a venture capitalist makes me an optimist by nature, and I’m very optimistic about the future. However, individuals need to take ownership of their financial education. This isn’t the time to sit back and hope things will work out on their own. People need to stay informed about technological trends and constantly ask themselves how they can benefit from them. If you’re not learning and adapting, you’re likely falling behind, and with the world moving faster than most people realize, that’s a risky position to be in.
Hope isn’t a strategy — you have to put in the effort.
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