He Slept In a Dresser Drawer As a Kid… Now He Invests in 130+ Companies | Mike Sherbakov

Mike Sherbacov immigrated from Russia to the United States at age five and described freedom, personal agency, and entrepreneurship as the biggest opportunities America gave his family. After later traveling to 66 countries, he said he came to value the U.S. particularly for its willingness to let entrepreneurs fail, recover, and receive backing again.

Sherbacov said his family arrived with almost nothing. In Russia, he was so young and poor that he slept in a padded dresser drawer; after arriving in California, the family initially settled in El Cerrito near Berkeley and owned an old red Honda that sometimes could not carry the children up their steep street.

Both of Sherbacov’s parents were educated as physicists, while his father developed unusual expertise as a software engineer. Sherbacov said Russian magazines featured his father for work associated with creating the first PC in Russia, which helped attract an American employer that brought him to the United States; Sherbacov also said the company substantially underpaid his father as an immigrant.

His mother initially stayed home to raise four children and later spent about 20 years teaching. Sherbacov described her as deeply interested in mentoring and said she handled the family’s heavy schedule of school, sports, music, and other activities while the children were young.

Sherbacov portrayed his siblings’ careers as examples of the family’s education-first culture. He said his oldest sister attended Stanford and worked at Bain Capital, another sister received a full scholarship to William & Mary and earned a neuroscience doctorate, and his younger brother earned a Berkeley master’s degree before spending seven years at Palantir and five at OpenAI.

The central lessons Sherbacov says he absorbed from his parents were work ethic, discipline, reliability, and making full use of opportunity. He said he never remembers seeing his parents sleep in or promise something they failed to do, arguing that their example mattered more than anything they explicitly taught him.

Sherbacov has a 21-year-old son and has tried to teach him through service rather than lectures. He said his son has accompanied him to Mexico to build homes for underserved communities for roughly 14 years, beginning when the boy was seven.

The September 11 attacks were the immediate catalyst for Sherbacov joining the Marine Corps at 18. He said he felt personally compelled to defend a country that had given his immigrant family substantial opportunity, while also wanting to test himself through something extremely difficult.

He also joined the Marines to become independent from his family and chart his own path. Challenge, camaraderie, patriotism, brotherhood, and adventure all appealed to him, and he did not tell his parents about the enlistment until roughly two weeks before leaving for boot camp.

Sherbacov entered the Marines in June 2003, when casualties from the Iraq War were a very real concern for his family and fellow recruits. He recalled a boot-camp platoon of 86 recruits being warned that, realistically, someone among them might not survive the coming years of service.

The enduring lesson he took from Marine boot camp was that perceived exhaustion comes well before actual capacity. He described instructors repeatedly demanding “one more” repetition and using responsibility for the rest of the platoon to show recruits that they could continue beyond the point where they believed they were finished.

Sherbacov served five years and said he received multiple meritorious promotions, advancing faster than normal time-in-grade rules allowed. The Marines wanted to retain him, but his frustration with institutional limits increasingly pushed him toward entrepreneurship.

While running a communications shop at Camp Pendleton and controlling a substantial budget, Sherbacov repeatedly proposed ways to do things “better, faster, cheaper.” He said those ideas were often rejected because the military followed established procedures, convincing him he wanted an environment without an imposed ceiling on what he could build.

The Veteran Fund’s investment thesis emphasizes three traits Sherbacov associates with strong veteran founders: leadership, resilience, and purpose. He stressed that military service is not a perfect predictor of entrepreneurial success, but argued that some veterans emerge having learned to lead from the bottom, recover from adversity, and work in service of something larger than themselves.

Purpose matters to Sherbacov because he wants founders whose motivation survives difficulty. He said a large market or desire to become wealthy may motivate someone, but he places more weight on founders who feel deeply compelled to solve the problem and keep working when conditions deteriorate.

Sherbacov reduces early-stage investing to three main questions: team, product, and market. The product needs differentiation and defensibility, the market must be large enough to support venture-scale outcomes, and at the earliest stages—when the product and market remain uncertain—he gives the greatest weight to the founding team.

His most repeated founder criterion is the “no-quit factor.” Because early products may still be rudimentary and early customer numbers small, he would rather back a founder he believes will persist long enough to solve the inevitable problems.

Sherbacov distinguished angel-investor economics from venture-capital economics. He said an angel investing personal money may be satisfied with a 5–10× outcome, while an early-stage venture fund often needs to underwrite the possibility of roughly 100× outcomes because many portfolio companies will fail or return too little to move the entire fund.

He described startup financing as a progression from bootstrapping to friends-and-family capital, angels, and eventually institutional investors. Founders may initially use savings, credit cards, or loans; the informal early round is sometimes jokingly called “friends, family and fools,” after which outside angels and venture firms enter.

At a venture firm, the general partners manage capital supplied by limited partners and owe them fiduciary responsibilities. Sherbacov emphasized that fund managers are stewards of other people’s money rather than simply investors deploying their own wealth.

Sherbacov explained venture’s “power law”: one or two exceptional companies can return an entire fund while many others fail or produce modest outcomes. He cited bad timing, poor hires, inappropriate investors, dysfunctional boards, lost contracts, and technological disruption among the reasons otherwise promising startups can collapse.

The Veteran Fund generally operates at the pre-seed and seed stages, where uncertainty and potential multiples are highest. Sherbacov contrasted this with later Series D, E, or later-stage investments, where companies are more de-risked and investors therefore accept lower prospective multiples.

Sherbacov said an early-stage venture fund might hold roughly 25–30 companies; Veteran Fund’s first fund contains 26. Because each investment represents only part of the portfolio, a 5× return on one company can be insufficient to drive strong overall fund economics.

He explained the common “2 and 20” venture model as a 2% management fee plus 20% carried interest on profits. Using a simplified $20 million fund example, he said a $1 million investment returning $100 million could first return the LPs’ original $20 million fund capital, after which the remaining $80 million would be split 80/20—producing $16 million in carry for the general partners in that example.

Sherbacov said venture firms commonly raise new funds on roughly two-year “vintage” cycles and then deploy the capital over approximately two years. During that period they make investments, support portfolio companies, and help them reach later financing rounds.

He left the Marines in 2008 and immediately entered San Diego State University, studying kinesiology and psychology. The GI Bill covered school, but he had limited capital and wanted both to remain in expensive San Diego and to provide a strong life there for his son.

Conventional employment did not appeal to him because it appeared to recreate the ceiling he had disliked in the military. He said he never wanted to work in a cubicle and instead looked for an entrepreneurial opportunity at the intersection of his skills, experience, interests, and desired impact.

His first major business was based on the FitBody Boot Camp model and required very little startup capital. He ordered the company’s instructional DVDs, followed the system closely, and built outdoor fitness classes around his existing interest in health, Muay Thai, jiu-jitsu, and physical training.

The economics were deliberately simple: roughly $250 per member per month, with 33 recurring members producing about $100,000 in annual revenue for one location. Sherbacov said he hit that target in around three months at his first location in the Del Mar/Carmel Valley area.

His early customer-acquisition strategy was almost entirely direct, relationship-based founder sales. He personally went door to door through affluent local businesses, offered owners free fitness classes if they brought a guest, and ran three sessions a day at the Carmel Valley Recreation Center behind Del Mar Highlands.

Sherbacov views willingness to talk directly to customers as a basic test of whether someone is suited to entrepreneurship. He argued that founders who are afraid to call, approach, or personally sell to their earliest customers will struggle to build anything from zero.

The first boot-camp location grew from the initial 33–34 members to more than 60 and eventually around 70. Whenever a location approached the 33-member threshold, Sherbacov opened another, including one at Liberty Station in Point Loma, and hired trainers to operate existing sites while he expanded.

He ultimately scaled the fitness operation across San Diego and Orange County and sold it to the first person he had hired. The exit was not enough to retire permanently, but it gave him the freedom to travel and begin making investments.

Sherbacov next started Karuna Towels after completing yoga-teacher training and identifying a market for towels placed over yoga mats; he later sold that company as well. He subsequently joined Wildfire, a venture-backed ClassPass competitor, and concluded that technology businesses offered substantially greater scalability than service or ordinary consumer-product businesses.

He made his first angel investment in 2015 and initially invested only his own money because he wanted a track record before assuming responsibility for outside capital. Sherbacov said he invests only when he has high conviction and claimed that he has never had to tell an outside investor that he lost their money.

Sherbacov entered cryptocurrency in 2016 after a friend introduced him to it and said he bought Bitcoin at about $800. He said several crypto projects subsequently generated returns in the thousands of times his original investment, alongside successful investments in conventional technology companies.

Before launching his venture fund, he also ran the San Diego program of Founder Institute and worked with partners including JPMorgan. He said years of advising, investing across industries, and seeing acquisitions and IPOs eventually gave him confidence that he had developed a repeatable investment process.

The immediate catalyst for Veteran Fund came through Sherbacov’s longtime accelerator partner Ryan. After an investment led by Air Force veteran Mike Frasier produced an exit in which Frasier reportedly received $35 million and became the fund’s first LP, Ryan proposed a fund specifically focused on veteran leadership and critical technologies.

Sherbacov then recruited his friend Justin Nama and later a fourth partner, Lisa. He described Nama as a former Marine officer and five-year federal prosecutor who helped scale CrossFit from about 10 gyms and helped establish the Honor Foundation, a transition organization for Navy SEALs and other special operators.

Sherbacov’s first $25,000 angel investment became an important lesson in inadequate diligence. He backed a founder who had previously sold a company for hundreds of millions of dollars and whom he knew personally, but he relied too heavily on that past success and the impressive people surrounding the new venture rather than rigorously examining the new business model and the founder’s motivation.

Seeing that founder repeatedly traveling in places such as Bali, Tulum, and Costa Rica while providing little investor communication sharpened the lesson. Sherbacov said he had failed to establish expectations such as quarterly investor updates and learned that previous entrepreneurial success does not guarantee continuing hunger or suitability for a different business.

Despite that experience, Sherbacov said most investors still favor experienced second-time founders because first-time founders carry different execution risks. His conclusion was not that one category always wins, but that a prior exit must be assessed alongside present motivation, market fit, and the founder’s continued willingness to work.

He cited Firestorm as a successful example of backing an already wealthy second-time founder. Founder Dan Magy had previously sold a cybersecurity company in a nine-figure transaction, was initially an LP in Veteran Fund, and then returned to entrepreneurship after only a brief retirement to build 3D-printed drones and advanced-manufacturing technology; Sherbacov said Veteran Fund was among Firestorm’s earliest checks and that the company later raised an $85 million Series B.

Sherbacov argued that successful founders often raise money they do not strictly need because strategic investors contribute far more than capital. Valuable investors can open doors to customers, contracts, follow-on investors, marketing, talent, or expertise, which means founders should vet investors just as carefully as investors vet founders.

In oversubscribed “hot” rounds, the power can shift toward the founder because investors compete for limited allocation. Sherbacov said venture firms must sometimes make a case for why they deserve a place on the cap table and what concrete value they can add beyond writing a check.

Sherbacov said Shark Tank helped spark his early fascination with investing but cautioned that it is not representative of how normal venture investing works. He nevertheless used the show’s investor competition and specialization as a simple illustration of why founders sometimes choose one source of capital over another.

He believes traditional B2B software is being disrupted by AI and modern cloud tools that let small teams reproduce capabilities that previously took established software companies years to build. Veteran Fund therefore focuses heavily on “AI-adjacent” businesses and particularly likes the intersection of physical systems and software—what Sherbacov called “atoms and bits.”

One example was a 2022 investment in a company described as Lonear Lunar, whose ambition was to put data centers on the Moon. Sherbacov said the concept initially sounded implausible, but the team’s case around data sovereignty and off-Earth disaster recovery convinced the fund to invest.

Sherbacov said that lunar-data company subsequently completed two successful Moon missions, including a landing near the lunar south pole, and that he attended a Falcon 9 launch carrying the company’s technology. The experience reinforced his conviction that the lunar economy and space infrastructure could become major investment categories.

His space thesis goes well beyond data centers. He expects the Moon eventually to become an operating base for deeper-space activity and said he believes humanity will ultimately become interplanetary, with infrastructure being built around launch systems, communications, robotics, and potentially lunar mass drivers.

Energy is another major investment theme because Sherbacov expects data-center electricity requirements by 2030 to exceed current supply. He believes nuclear power will be necessary alongside renewables and personally invested in Valor Atomics; among nuclear technologies, he singled out small modular reactors as especially promising.

He also identified domestic critical-mineral capacity and reindustrialization as important opportunities. Sherbacov said current critical-mineral supply chains are excessively dependent on China and noted that Veteran Fund had invested in a company working on mineral recapture.

Humanoid and service robotics are another area he expects to expand rapidly. He used restaurants as an example, arguing that robots could eventually provide standardized portions and repeatable preparation in jobs currently performed manually.

Sherbacov identified “insatiable curiosity” as the trait he sees most consistently among strong professional investors. Investors cannot personally possess decades of expertise in every sector, so his firm combines broad learning by the partners with subject-matter expertise from LPs and other specialists.

He views venture investing partly as an attempt to predict—and actively choose—the future. Putting millions of dollars into a startup is, in his framing, a vote that the technology should exist; he expressed optimism about solving housing, energy, and food constraints and about long-term human expansion into space.

Veteran Fund uses what Sherbacov described as a European waterfall for distributions. Under the fund’s limited-partner agreement, proceeds from liquidity events such as acquisitions, secondary transactions, or IPOs flow back according to the fund-level distribution rules rather than being treated simply as isolated deal-by-deal profits.

Liquidity can sometimes come before or after a conventional exit through secondary or tender transactions, and funds can distribute public shares rather than immediately selling everything for cash. Sherbacov said Veteran Fund generally prefers to distribute shares to LPs and let them decide whether to continue holding them.

He contrasted that approach with evergreen funds, which may continue holding companies after they become public because institutional investors want continuing exposure rather than cash distributions. He said large venture managers often represent pensions, endowments, hospitals, and other institutions whose capital is continuously reinvested.

Sherbacov said institutional portfolios commonly place roughly 10–15% into alternative or higher-risk assets such as venture capital. Rather than diligence thousands of startups directly, institutions delegate that work to specialist funds whose managers they trust.

For anyone trying to start a venture fund, Sherbacov said the two indispensable assets are LP relationships and differentiated deal flow. A manager must continually raise capital while also proving an ability to source, diligence, win, and support unusually strong companies.

His recommendation is to prove those capabilities with special-purpose vehicles before launching a conventional fund. An SPV lets a manager assemble investors around a single deal, establish a sourcing and fundraising record, and earn management fees and carried interest without first taking on the complexity of a full multi-company fund.

Sherbacov suggested completing roughly three to ten SPVs before raising a full fund. A sequence of successful deal-by-deal investments can show that the manager can obtain scarce allocation, attract other investors, and produce returns that make those investors willing to back future opportunities.

He said SPV economics can be structured flexibly—for example, a 1% management fee and 10% carry or the more traditional 2% and 20%. Unlike a fund, where capital is committed before specific investments are chosen, the investors decide whether to participate in each SPV individually.

Veteran Fund used that structure for an additional investment in Havoc AI and, according to Sherbacov, raised approximately $2.2 million from its investors in one week. The firm already had exposure to the company through its fund but used the SPV to give interested LPs additional access.

Veteran Fund’s distinctive sourcing advantage is its narrow identity: veterans building critical technology. Sherbacov said that once the firm established that niche, other investors began automatically referring veteran-led technology companies to it.

Sherbacov said the firm’s network includes major venture figures and firms, with Jack Selby and Tim Draper among its LPs. He said relationships with investors around firms such as Andreessen and Founders Fund create referral flow whenever those investors encounter an attractive company with veteran leadership.

The first Veteran Fund raise began with an extremely concentrated relationship strategy. Sherbacov and his partners listed ten people they believed would invest if called directly; he said all ten agreed, after which investment performance and referrals gradually expanded the LP network.

Real-estate investors became one source of new LPs because some wanted exposure to higher-risk, potentially higher-return early-stage technology. Sherbacov described one relationship that led through Lisa to a real-estate investor, then onward to Robert Kiyosaki and additional contacts, illustrating how trusted LPs can become distribution channels into their own networks.

Sherbacov considers trust and integrity foundational assets in venture capital because investors, founders, and fund managers operate within tightly connected networks. He argued that breaking one commitment or behaving dishonestly can destroy years of reputation, while consistently doing what you promise makes capital and opportunities progressively easier to attract.

Sherbacov said tax considerations were one factor in his move from California to Austin, although not the only one. He also cited Austin’s people, food, music, technology community, investors, geographic centrality, and broader personal fit.

He criticized California’s tax burden and what he viewed as insufficient transparency and accountability for government spending, particularly around homelessness and nonprofit funding. He framed these as his own views and part of why he felt more aligned with Texas from both a business and personal perspective.

Sherbacov said sophisticated tax and estate planning becomes increasingly important before large liquidity events. He wished he had learned earlier about compliant structures that can reduce or defer tax exposure and said his businesses and investments collectively generated more than $1 million in taxes the previous year.

He acknowledged that some wealthy founders knowingly remain in higher-tax locations because lifestyle matters more to them than optimization. His own position was that Austin works because he genuinely wants to live there, not merely because of Texas tax treatment.

Sherbacov still described California positively on a personal level and said he could imagine its appeal recovering if state policy changed. His broader point was that U.S. states compete for founders, investors, and high-income residents through different policy environments, with Texas, Florida, and Puerto Rico cited as examples attracting some of those people.

The principle Sherbacov most wants to leave to younger people is simply: “Do great things.” The phrase became the tagline for Greatness Ventures, his holding company and philanthropic work, and he emphasized the verb “do”: action matters more to him than merely discussing ambitions.

His philanthropy remains active rather than symbolic; he said another group trip to Mexico to build homes was scheduled within a few weeks of the interview. These projects also connect back to the service-oriented values he has tried to demonstrate to his son.

Sherbacov interprets “great things” individually rather than prescribing entrepreneurship, investing, or any particular career. Drawing on his psychology studies and Maslow’s idea of self-actualization, he said people should identify what they are capable of becoming and at minimum take the first concrete step—contact the person, read the book, join the community, or otherwise begin.

Asked how he wants to be remembered, Sherbacov said he wants people to believe he did everything he could while he was alive. He thinks frequently about mortality and said he currently feels aligned with the roles he cares about—as a father, son, investor, man of faith, and friend—while still describing himself as flawed and trying to improve.