1218 registrations including 157 GPs, 72 LPs, 59 Family Offices, 253 Angel Investors, 374 Venture Studios, and 12 Funds of Funds.
14 speakers with a total AUM of ~$10B, 2 moderators, 649 unique visitors & 421 at peak + 1 cake on Max Pog's face :grin:. Check the first 30 seconds to feel it.
VC hacks from the Hack Contribution session
Define your main challenge & use tags to navigate. Contemplate on each card and think whether you can use this idea in your activity. This is not a direct guide, but ideas to jumpstart the creative process.
Never stop filling the funnel with prospective LPs
When you are starting to raise for your first fund, the vast majority of your investors come from your existing network and mostly made up from high net worth individuals. Great, you have a compiled a shortlist of 200 - 300 potential LPs and start reaching out, booking calls and celebrating your first commitments. However, you will realise that you burn through your shortlist faster and with a lower conversion rate than expected. The danger is that you lose the required momentum for fundraising as you have to extend your shortlist with now 2nd or even 3rd degree connections, which take much longer to reach out to. In order to avoid this loss of momentum, ensure to continously spend a portion of your time on filling your funnel of potential LPs to avoid a slowdown down the road.
Attention to dynamics between the founders or between the team of founders and executives
If hack to a VC: When taking a meeting, place more emphasis on the dynamics between the founders, as this will reveal much more about the future success of the company than you might imagine. Do the founders compete for the same 'role' in the meeting, or are they in sync, complementing each other? This small hack made a huge difference for me when talking to both VCs and founders.
If hack to a founder in VC meeting: When taking an investor meeting, place more emphasis on making sure there's a good dynamic between your team of founders and executives, as this will reveal much more about the future success of the company to a VC than you might imagine. Do you compete for the same 'role' in the meeting, or is your team in sync, complementing each other? This small hack made a huge difference for me when advising founders.
GPs raise the most money, most successfully when they have a well-built, connected, secure, and thoughtful plan to go to market. This includes PPM that's well thought out and executed but ease and organization in the dissemination of this information is incredibly important. You need a data room that is easily sendable and tracks LP interaction. It should have NDA and watermarking capabilities. You need a dynamic, digital subscription process that's easy for LPs to navigate. You need a digital dashboard to manage all of these items as your prospective LPs lean in and then you need a good story to get them across the line. Go see them in person, it's a game-changer.
I found it helpful to reach out to executives I used to work with since the beginning of my career. As an emerging fund manager, they are investing in me because they know me, there is trust. I'm also reaching out to the corporate venture groups at the corporations I've worked at. They are interested because they want to broaden their own funnel for future M&A opportunities and leverage cash off the balance sheet to do so.
Deep level of involvement in the investment process
I believe it's crucial to have a solid WHY and to really have skin in the game. At DOPAMINE, we've embodied this principle by investing our own money, thereby demonstrating our confidence and capability. We were very meticulous in choosing our founders, ensuring that each one could meaningfully contribute to both the funds and the startups we invest in. Our investment approach transcends the traditional; we are not just passive investors. We immerse ourselves fully, becoming not only financial supporters but also customers, fans, and advisors to our startups. This deep level of involvement is a testament to our commitment, which extends far beyond mere financial inputs. Now, equipped with a solid background and a proven track record, we are poised to engage with investors. Our goal is to secure additional funding that will enable us to take our ventures to the next level.
Enhancing your outreach strategy: leveraging Family Office List (promo code: Venture 10) and LinkedIn
Consider utilizing Family Office List, a resource that provides the most accurate and comprehensive list of Family Offices. This platform ensures that your outreach is well-aligned with your target audience, recognizing the unique nature of each Family Office.
To maximize your engagement, leverage the power of LinkedIn. Establishing connections on this professional network is a powerful way to broaden your reach within the Family Office community.
Here's a step-by-step approach: Use Family Office List: Begin your prospecting journey by identifying well-aligned Family Offices through the accurate and guaranteed data provided by Family Office List. Craft a Value-Add Approach: Building trust and relationships is a gradual process. Lead with a value-add approach grounded in thorough research and respectful outreach. Tailor your messages to showcase how your offerings align with the specific needs and preferences of each Family Office. Harness LinkedIn for Connection: LinkedIn is a dynamic platform for professional networking. Connect with key decision-makers within the identified Family Offices, share insights, and engage in meaningful conversations to establish rapport.
Remember, success in prospecting Family Offices lies in understanding their unique characteristics, tailoring your approach, and fostering genuine connections over time. By integrating these strategies, you can significantly enhance your outreach and increase your chances of building lasting relationships within the Family Office community.
Start your outreach with the "permission email" -- simply stating you WILL be raising a VC fund in XX months, and can you have their permission to add them to your Update list? Then send a monthly update with fund progress, interesting dealflow, etc. In this way, you are "nurturing" relationships with LPs before hitting them up for money, and it's much more effective than going in with a cold "hard" pitch.
If you discover within a call that an investor isn't the right fit for you, ask them if they know anyone in their network that would fit you better - ask if they're willing to give an introduction. VCs trust their network, use this to your advantage to get into the right rooms.
In order to find the LP's, I am always live on Linkedin and following the people who interacts with the posts of VC's. Since if they send likes or leave comments, probably they have already invest in that fund or at least they are interested in investing in that fund.
Be prepared for a long journey, it's often underestimated how long it takes to bring a fund online at a minimum viable size. Throughout the fundraising process, you'll hear a lot of "no". However, keep in mind a "no" today doesn't mean it will be a "no" tomorrow, or for your next fund. Strategies change and keep potential LPs updated over time with strategic communications.
Network, network, and network some more. Create a story that matches LPs investment criteria and listen to what they are saying. You can understand a lot by listening carefully and then tailor your response accordingly.
Invest in other VC funds lightly. Then ask those GPs to promote your fund to their LPs, if they feel it would be valuable to their LPs. Show up at those LP meetings for the funds you've invested in and build genuine relationships with other LPs who are there.
Recognizing that we are a Market Programs specialist that develops Investor Development Campaigns for our clients seeking funding - we have developed a methodology/process orientation - of which - a key element is a 20-Question Survey (upfront) that pinpoints our clients' areas of focus and priorities. This not only fuels the make-up of the campaign - it also allows us to map onto Target Investors and Funding sources that fit our client's interests and needs. Matchmaking is not easy - particularly at the personality and style levels. From the Investor standpoint - this is a great tool - as it streamlines and simplifies the tough job of aligning clients with Investment sources and assuring that their interactions will be effective. Not sure this can be classified, as a Hack - although it is a tool in the overall process that makes a difference - and eliminates guesswork.
Five. That's the minimum number of touchpoints you need with a prospective LP in order to get them to a commitment. Do not think that you can get an LP to a commitment on one or two touch points; doing so will jeopardize the commitment. Trust is the greatest economic force in the world and this must be built over time.
Interactive Investment Workshops - ost interactive investment workshops that provide a hands-on experience for potential LPs. These workshops could cover various aspects of venture capital, such as deal sourcing, due diligence, and portfolio management. Engage participants in real-life case studies and let them experience the decision-making process of a VC.
I used Upwork to hire people to find emails for me. I made a spreadsheet of thousands of VC website links and LinkedIn profiles and was able to contact them all using Gmass with my pitch.
More ideas, tips, and recommendations
Position the fund as a thought leader through publishing insightful content, market analysis, and educational materials about venture capital investing.
Host a joint GenAI hackathon with LP teams to improve aspects of their workflow and develop skills together.
Go and talk to people in meetups or participate in conferences, connect with family offices on Linkedin, provide short presentations (not more than 3-5 pages), and reach out to friends of friends, etc.
Use global investors like the Keiretsu forum which can connect you to both International capital and markets.
Ask your existing LPs for just one introduction to another prospective investor. Only ask for one - changes their cognitive frame of reference.
Leverage connectors in your network (who are not LPs but have a strong network) to get warm introductions to LPs in their network.
Compartmentalize fundraising and private relationships; learn to embrace sales pitches and love to "kiss a lot of frogs" but when you hit the nail also celebrate the success.
Use individual SPVs for deals to build trust before getting LPs to commit to a blind pool of capital!
Look out for new forms of private capital, outside of the typical LP profile. There are many individual/corporate investors with appetitives for private investments which a typical GP won't approach.
Leverage your network, and have a clear understanding of the numbers in case of rebuttal. Do proper research to differentiate yourself from others.
Demonstrate solid traction.
Make the best first impression, good posture, pumped chest and shake hands confidently.
Be active on Linkedin and do cold outreaches shamelessly.
Headhunting, intro from other funds, and partnerships with accelerators
Our approach to deal origination involves several activities ranging from headhunting which involves an in-house team or specialized scouts who actively seek out promising startups. Networking events and industry-specific gatherings provide direct connections with entrepreneurs. Additionally, we leverage collaborations with other VC funds to lead to potential introductions to startups within their portfolios, especially through co-investment opportunities and syndication networks. In addition, we also have Partnerships with other accelerators and Entrepreneur Support Organisations. These collaborations grant us early access to startups graduating from accelerator programs, often through demo days and mentorship initiatives. These have proven to be a valuable source for vetted and high-potential investment opportunities.
After a successful deal, I asked my clients about their colleagues, business environment, and business partners. How they thrive in the current market etc. During conversation I also share my intake about possibilities for their projects, I even mention feasible solutions. Because of that honesty, clients instead of passing the solutions, recommend me directly to their peers, and with an introduction covering a successfully done deal, landing a new contract is easy. What's worth to mention, bragging about the last deals done doesn't have the same effect, in fact, it's totally opposite to handshake recommendations.
Strategic expansion of ideation and hackathons for robust deal flow
In today's dynamic startup ecosystem, it's crucial for venture capitalists and studios to stay ahead of the curve in discovering promising founders and startups. Building upon the successful model of organizing ideation and hackathons, we can further refine this strategy to tap into the immense potential that universities offer. Here's how: 1. Diversify Ideation Events:
Beyond traditional hackathons, host a variety of ideation events like pitch competitions, design thinking workshops, and innovation challenges. This will attract a wider range of entrepreneurial talent.
2. Collaborate with Universities:
Forge strategic partnerships with universities, creating a win-win scenario where educational institutions benefit from real-world problem-solving, and VCs gain access to ambitious, young minds.
Establish dedicated innovation centers or incubators within universities where students, faculty, and industry experts can collaborate on entrepreneurial projects.
3. Mentorship and Guidance:
Offer mentorship and guidance to participating students. Provide access to industry experts, successful entrepreneurs, and investors who can nurture their ideas and ambitions.
4. Funding Opportunities:
Extend financial support to the most promising projects emerging from these ideation events. This could be in the form of seed funding, grants, or access to VC networks.
5. Targeted Themes:
Focus ideation events on specific industry verticals or emerging tech trends. This ensures that the startups and founders you discover align with your investment thesis.
6. Virtual and Hybrid Models:
Adapt to the changing landscape by incorporating virtual and hybrid event formats. This will allow for broader participation, transcending geographical barriers.
7. Promote Entrepreneurial Education:
Encourage universities to include entrepreneurship and innovation courses in their curriculum. This not only fosters a culture of entrepreneurship but also produces startups with a solid foundation.
8. Data-Driven Evaluation:
Implement data analytics and AI tools to evaluate the potential of startups objectively. This helps in identifying the most promising prospects efficiently.
9. Community Building:
Create a strong community around these ideation events. This community can serve as a valuable resource for networking, collaboration, and idea exchange.
By expanding the concept of organizing ideation events and hackathons, with a particular emphasis on universities, venture capitalists and studios can tap into a continuous stream of fresh ideas and innovative startups. This approach not only broadens the deal flow but also contributes to fostering the next generation of entrepreneurial talent.
The main thing/factor for deal-flow generation is a 'Good Funnel'.There are different types of funnels - look at the infographic (source: a1000.tech, Chennakeshav Adya, LBS). And if you are aiming to create a deep tech startups funnel, you would cooperate with as many Academic Partners (Universities). They usually have 3 streams - Scientific, Industrial, and Student startups. Great access to deep tech early-stage startups and ideas. More Academic Partnerships with VC - more good deep tech startups. Good ones.
Collaborate with like-minded people who are passionate about the projects. When team members are aligned with the project, and are certain that the world needs the venture, chances of success are much higher. When assessing a project, apart from the usual numbers, business plans, and term sheets, it would be good to spend some time with the founders to see what they want out of their project. Are they really passionate about what they are doing? Who are they out of the work environment? Characters really play a big role in the success of the venture. We have spent the past 2 years doing due diligence on several projects that seemed to have great potential and did pass our initial due process. But as we spent a bit more time with the founders, their alternate characters out of work drew up some red flags and we eventually dropped the projects after repeated red flags started popping up. I'm sure others have come across similar situations but I thought it would be a good reminder for someone planning to go into VC or starting a venture suite setup.
The economics and structure of ventures are changing. It is adapting to the large amount of capital chasing returns. Structurally, VCs are thinking about how they can engage with companies to help them succeed. I believe for the health of the startup economy and the economy as a whole it is important to talk about what works, and what doesn't and succeed together. Be connected in technical communities. Go to the industry conferences you are targeting and find the most forward-thinking people there. Create a stable over a number of years of go-to people with whom you build long-lasting and stable relationships.
I've backed early-stage founders on crowd equity platforms and connected with them to tell their stories to others about their current crowd equity raise. Multiple times, this led to 1) additional investment opportunities with the company, 2) being on the first list of prospective investors when they started their next company years later, 3) referrals from their network.
Initiate a "Problem Lab" with the private sector and public sector that is industry-specific to solicit the problem areas that are common to the segment and the companies. This creates a much-curated set of problem areas to source the deal flow. Example: Rather than saying come and build a "Health & Wellness" startup, you can say come and solve a problem in these specific areas - 1. Mental health solutions for under 24 year old, 2. Aging at home solutions 3. Managing pre and post-chronic disease conditions etc. This helps to target your marketing and solicit the companies better.
At Mandala Space Ventures, we’re building the emerging space economy by teaming up with visionary founders and entrepreneurs, harnessing the expertise of our world-renowned technical team, and leveraging our strategic access to capital. The space market size is projected to be over a trillion dollars by 2030, and we believe the right time to capitalize on this is now. We have a highly technical team of world-renowned scientists and engineers from JPL and Caltech which enables us to perform unparalleled levels of diligence on prospective investments which LPs in this industry require. We also rely on our team's expertise to incubate revolutionary companies within the space industry.
It is important to have a large, focused, and reliable network community. This helps to provide startups that are already recommended by someone in the network; and you get startups and innovations from others that you hardly find yourself. A good branding on LinkedIn helps founders reach out to you, so you get more deals on your table. Also, the deals will better match your requirements if you post these clearly.
Run a service company to design products/ cyber security. The ideators and product owners will come to you. You'll get to have a comprehensive understanding of the product. You will get to know the trends even before it hits the market. It is how I got access to exclusive deals and clarity on the team working on it.
I have created my own deal-sourcing plan on how to source deals. It includes looking for deals at networking events, attending pitch competitions, and building relationships with founders, VCs, and other ecosystem builders. The most important part of this is to take the time to develop the relationship, as that will build trust.
One of the key secrets to success is active participation and the creation of a network of professional contacts, especially in dynamic and innovative fields like cryptocurrencies, investments, and business. The ability to build a strong community of like-minded professionals not only opens up new opportunities for personal and professional growth but also facilitates the attraction of key partners, talented employees, and financial resources. This creates a conducive environment for the exchange of knowledge, ideas, and resources, which is the cornerstone for collaborative progress and the achievement of mutual benefits.
Look for Product Hunt, media houses, and other product launch platforms for looking for startups that are solving interesting and hard problems. This also ensures some validation from the community members who provide some initial feedback that helps validate the thesis as well.
1) Talking to engineers/scientists/researchers or people in labs and creating something different to attract them. 2) Interacting with other seed/Angel investors, VC investors, etc. 3) Asking existing entrepreneurs to introduce their friends (mostly entrepreneurs).
Maybe this is a popular one already, but searching for people working at "Stealth Startup, New Company, NewCo, or Working on Something New" on LinkedIn with filters for your target thesis (industry background, geography, etc.) is a great way to find new founders and get into conversations early.
The only "hack" I have used for deal flow is to connect with as many people and organizations that have the deal flow you are looking for, and then figure out how to add value to them. Deal flow is about access and there really isn't any hack for access, it's just a lot of relationship-building, personal knowledge, and trading value.
You don't have to worry about deal flow if you ideate and build your own ventures. That's one of the benefits of a studio model. In other words, because studios tend to build their own startups rather than invest in startups others have built, if you run a study, you create your own deal flow rather than chasing deal flow.
Today's marketplace is all about word of mouth and guerilla marketing. Always be launching something in your company whether it's a new website or a new partnership. Create something that shows you're producing and give clients a way to join in on that.
Bring added value to the table in addition to money
When you bring more to the table than money and are able to speak the language of the companies you would like to invest in by knowing their industry and bringing complementary expertise/network to the table, you are more likely to get access to quality deal flow. The best companies do find access to capital and can be selective of the partners/investors they want to collaborate with.
My VC hack to generate deal flow is leveraging the extensive network and insights gained from my startup studio experience. By actively engaging with the startup ecosystem, attending relevant events, and nurturing relationships, I consistently uncover promising investment opportunities that align with our strategic focus.
More ideas, tips, and recommendations
Give others deal flow that you're not interested in and they in turn will help you deal flow with people they know from their network.
Run an accelerator that allows you to dive deeply into startups business and see how the team executes.
Hosting a community-driven, multidisciplinary summit can allow innovation, relationship-building, industry knowledge, and natural deal flow.
Look at building digital solutions for local markets, especially in emerging markets.
Use the Marketing Hack known as “NewsJacking” for Deal Flow Creation.
Create a comprehensive program of pathway to procurement/exit starting with key industry problems and using a Venture Studio as scaffolding.
Everyone who wants one gets a first meeting. It may not make sense to ever meet with them again, but you never know where a conversation can go. Make room for serendipity!
Leverage ecosystem champions, lawyers, venture studios, etc, to get the network effect going.
Leverage SM personally, showing your expertise on X and Linkedin would make people come to you more.
Leveraging Data Analytics and AI for Enhanced Deal Flow with for example https://novable.com/scott/.
Speak on panels or other public speaking opportunities. Be well prepared and attend in person all kinds of relevant events.
Collect insights from startups during offline events. Startup founders can later fill in data and upload a pitch deck but the first contact is assured perfectly.
Change the front end of the "funnel" and use a variety of cutting-edge technologies to better source.
Be closely connected with universities to identify spin-outs from their current research.
Connect with someone who has a lot and provide them some value in return for some access.
Be a Giver. Bring value and give in every conversation you have.
After working specifically with women founders around the globe for 10+ years (and being one myself for 30+ years), here is something I don't see addressed enough: Investors, when women founders are standing in front of you to pitch their ideas, note that they've prevailed against extraordinary circumstances to be there -- much of it invisible. Things like social conditioning, parental conversations, perfectionism, and all the gauntlets that stand in the way of a woman's confidence being fully expressed, and they need specific mentorship in these areas *from a woman's perspective*. This isn't just feel-good advice: Their company's long-term success -- and that of your investment -- hinges on the women founders in your portfolio being fully equipped for leadership and scale. I've worked with women on 6 continents, and have yet to meet one who doesn't have a version of this kind of obstacle.
Diversity of thought, culture, background, and gender
It is a proven fact that you decrease the risk in venture capital, either by increasing the number of startups to be invested in, or the time and expertise you put into them. Another way of risk diversification would be putting more eyes that have different cultural and educational backgrounds, different ways of thinking, and gender- you will not only answer to the hype of more diversity, but you will also actually decrease the risk in your portfolio by seeing further and what others can't see. The trick is to let those people speak and include them in the decision-making process, if you just keep them for the photos, they cannot help you win this game.
Philippe Bouissou, Ph.D., a 30-year Silicon Valley veteran and growth expert has invented a new methodology to cut the Gordian growth knot and deliver sustained growth. It’s called A4 Precision AlignmentTM. It’s a rigorous, comprehensive, data-driven, and prescriptive top-line growth methodology. It delivers significant results: companies who have implemented it have seen an average uplift of 39% in their growth rate 12 months after using it. This new approach is based on the fundamental principle that a perfect alignment between the business and its target market is the only way to generate maximum growth. Misalignment increases disruption and friction during the multitude of interactions between the business and its market. There are, in fact, four universal axes of alignment, dubbed A1, A2, A3, and A4: look at the infographic. This core idea is applicable to growth-stage companies after they've achieved their Product X Market fit). We use this framework as a key tool for screening companies for investment and then use it for helping portfolio companies effectively scale.
As Ed Catmull said in Creativity, Inc.: “If you give a good idea to a mediocre team, they will screw it up. If you give a mediocre idea to a brilliant team, they will either fix it or throw it away and come up with something better.” The success of a startup often hinges on the ability of the team to adapt, innovate, and overcome challenges. A team with the right blend of skills, experience, and resilience is better equipped to navigate these challenges. High-caliber team is able to solve problems creatively and can transform mediocre idea into a successful venture. Even if the initial idea is suboptimal, a team that learns from its mistakes can discard the flawed concept and generate a more robust and viable one. At the core, the entrepreneurial vision of a team extends beyond a single idea. Investing in a team with a broader vision for their industry or market increases the likelihood that they will pivot or evolve their approach. This VC approach acknowledges that the true value lies not just in the initial idea but in the team's capacity to innovate, evolve, and ultimately achieve success.
Asking founders what their personal higher purpose in life is Usually, founders can sell a good product & tech roadmap along with having a company vision and mission statement that seemingly resonates with their company’s goals but I’ve seen having a personal higher purpose can really push those founders to go the extra mile in hard times. Look for founders that are mission-focused rather than focusing on fundraising It doesn't matter if the VCs are not presented with the most visually appealing slide deck or invited into the best co-working space/slick office space. What matters is that founders are focused on executing the company’s vision. Ask the key team members (non-executives) if they see the company vision being executed Head of department(s)that are vested(ESOP) in the company usually have a grip on reality that the execs somewhat become blinded to and therefore sometimes the best advice can come from talented non-exec team members, who are aligned with seeing the startup succeed in the best way possible.
Detailed, anonymous online feedback form for founders
Hi, I'm Marie Roker-Jones, a 2x founder and CEO of Curious Culture. Through a curiosity-driven approach, I help startups excel in their customer discovery and uncover hidden market opportunities for sustainable growth. In reshaping investor-founder relations, I leverage the Theory of Change to reduce biases, leading to more informed and diverse investment decisions. I equip investors with a broader, more diverse portfolio of innovative startups, ensuring better outcomes and a stronger, more inclusive investment landscape. My hack is for investors to develop a detailed, anonymous online feedback form that founders can fill out post-pitch. This form should include specific questions about different aspects of the pitch process, such as clarity of communication, perceived biases, respectfulness, and the level of engagement from investors. Include questions that directly address DEIBA. Ask founders to rate how inclusively they felt they were treated, whether they perceived any biases, and how well they believe their ideas were understood and valued. Be transparent and share a summary of the feedback with the founders who participated, along with the actions your firm plans to take.
No matter how great an idea is, as an Investor take time to look beyond the enormous potential of the idea and focus on the engine (Founder) that will propel the Idea. Here are some key virtues to look out for in an ideal Founder;
Reception to learning,
Unafraid to make mistakes and
Solid Conviction on a subject matter (thought leader) and
Educating investees in VC subjects before investing
In the symbiotic realm of startup ventures, the alliance between VC investors and entrepreneurs hinges on differing expectations. While investors seek a definitive return on capital, entrepreneurs aspire to the holistic success of their ventures. The initiation of fundraising often triggers a common challenge—information asymmetry—wherein investors are typically more versed in startup investments than entrepreneurs are in being invested in. To mitigate potential difficulties and misunderstandings, a proactive solution emerges: educate entrepreneurs in VC nuances before seeking investment. This not only aligns expectations, fostering transparent communication but also instills trust, akin to preparing for a journey by equipping oneself with essential knowledge
In venture evaluation, multiply rather than add risk probabilities to account for their compounded impact. Risks like IP, manufacturing, and market dynamics can intensify each other, so assessing them collectively offers a clearer risk picture. Target deals with minimal risk factors, ideally with only one major risk area. This focused approach simplifies risk management, enhancing the venture's manageability and success potential. This hack emphasizes thorough, realistic risk analysis in business, prioritizing opportunities with well-understood and manageable risks for greater success likelihood and fewer surprises.
As an investor, I look at the following important traits a) Quality of the management team (their previous experience, any example of problem they solved, any prior startup experience, cofounder alignment) b) Business model with a focus on profitability c) Articulation of the vision and the story by the founders d) Technology prowess – the solution should have tech as the main foundation.
I believe that innovation happens at the interface of different disciplines. At Carbon13, this has been the case with some of our most successful ventures. We have founders with insurance backgrounds looking at Carbon markets; engineers from Google looking at heat-pump sensor technology; and physicists thinking about how to use quantum calculations in the R&D of new materials. The second point is separate. When making investments in general, I try to think about how well the founder’s business is protected from competition i.e. how wide and deep is the moat around them?
Review actual ad data that showcases TAM itself vs just organic growth, this information fast tracks the know-how of how scalable based on demand and equally conversion the value prop is in the market. If they don't have it, get asked for it when investing.
We always conduct technical Due Diligence before the Investment Committee meeting, so we know exactly how sophisticated the technology is and what the tech risks the startup might encounter in the future. Legal and Financial Due Diligence come after we make the decision to invest, but technical Due Diligence comes before. This has allowed us to avoid investing in mere presentations and instead support only robust products and teams.
Do a 1.5-2h roasting session with startups to get more of their context before making the decision. VCs never provide founders with honest feedback. It's misaligned with their interests. That's why, as a non-VC (but advisor/angel/operator), I always not only listen to someone's pitch but ask them if they want me to roast their pitch (that is, say what's great but focus on what can be improved and why, going into the specifics and sharing what I didn't get and why, how to strengthen the pitch, etc). I find that founders oftentimes are very grateful to me because it's so refreshing.
In pitches towards investors, the startups should create a bigger targeted market. A too-narrow market makes their GTM strategy more difficult when they need to adapt or pivot or scale with a bigger portfolio of products. The startup's overall target market should be big enough. Often founders focus on too specialized niches, which limits their market reach. While in their attempt to cross the chasm, they should stay laser-focused on their sales targets. Enlarge the market in the pitch, and stay hyper-focused on the sales.
Avoid heard behavior: if everyone says one thing, move on to other topics / thesis / explanations. If you keep hearing the same thing over and over again (eg, we have to invest in AI), find an expert in the field and ask them why that thesis is good or bad 5 times or more, to get to the root cause.
VS is very very early-stage investing, it is mostly bet on the founder and the market. To find out if the market wants the problem to be solved, talk to at least 100 potential customers. At the end of the meeting, you should rate the meeting as Good, Bad, or Ugly based on the outcome. You should capture 1-3 memorable quotes from the interviewee and the top 3 problems. Before you start talking to users, Read "Moms Test".
When reviewing an investment opportunity, cut out the super-hyped words such as AI, blockchain, and climatetech, and then re-assess the business without them. In that sense, VC investors should look at tech as a means towards solving a real need, rather than an end itself. Hence, AI or blockchain are not sectors, whereas using AI/blockchain for solving industry or banking needs should constitute the vertical lens of analysis for investment opportunities.
Check profitability forecasts - it is essentially the concept of assessing which types of client segments the idea takes into account and how it translates to scalability. What I am interested in is how you add new customers without adding any incremental costs. I think this is the single most important thing after the product-market fit because we are at the most advanced stage in tech evolution than we have ever been so speed plus cost savings is everything.
From my experience, one unique understanding I have of investment decision-making regarding impact investment is to focus on the additionality of the investment. Additionality refers to the positive impact that an investment generates beyond what would have occurred without it. By assessing the degree of additionality, investors can identify opportunities that align with their social and environmental goals while maximizing their impact.
I have mentored about a hundred startups in deep tech. My key criteria for investment decision-making: 1. a time-bound project plan to deliver technical milestones, 2. business awareness, especially the ability to make commercial/financial scenarios (best/middle/worst), 3. have measures in place to mitigate risks re point 2.
Join a meeting with a company you are investing in that has the agenda of doing a Agile-style sprint planning exercise, where they identify the target customer/user, the high-level product concept, and the risk factors including the messaging for the launch in a short time. If the team struggles to do this, or doesn't work well together then they will probably fail.
We can extrapolate a lot from early- and early-growth-stage performance outside financial metrics, if we help founders pick the right things to measure. Founders (and investors!) tend to focus on balance sheets and other metrics that are not only functionally zero but are also lagging indicators of success. We should be after the leading indicators. We have a question process to dig for these "innovation accounting" metrics.
Wow. Attending here has exposed my hack as already in existence. Scout Fund, however, a career-long expertise in an area SME driven one. I have worked in health or medical-related research, administration, strategy, capital, and operations my whole career and figured there are too many ill-informed and unprofitable conversations about money in healthcare between doctors and administration. So, I moved to pursue healthtech startup venture as a way to pick clients and shape how I personally wanted to contribute to quality, access, and cost improvement!
More ideas, tips, and recommendations
Concentrate on timing, since arguably that kills more ideas than anything else -- what wave makes this make sense now vs 3-10 years ago when previous attempts failed?
Use a methodical three-perspective approach called Business POC. Works great in PreSeed! De-risks and decouples the valuation discussion.
Incorporate probability methods and multipliers into VC investment decision-making using decision trees.
Defining weak spots of the team and augmenting it with other resources from my network, filter out teams that are not humble enough for changes.
Run virtual 2-day boot camps inviting potential startups to join and resubmit their materials based on the workshops that were delivered during the boot camp and reassess their pitch.
Try the product, use it, play it - if possible. If it feels right, it's a positive. If not, pass.
Focus on valuation even when the founder is your best friend.
Get strong references on the promoters from people who have worked with them or done business with them.
When assessing a venture idea, out of all the components - competitors, unit economics, solution, etc - it almost always comes down to market size in the end.
Check profitability forecasts.
Don't go further if you discover red flags especially on "trust".
Build Authentic Relationships, Don't "Network" Building genuine relationships and providing support without expectations created deeper connections that will far surpass surface-level networking. It creates a support system where you can find guidance, advice, and collaboration opportunities. By providing value without expectations, you foster a culture of reciprocity and attract like-minded individuals who are willing to help you in return. This network becomes a valuable resource for knowledge, expertise, and access to opportunities that may not be readily available otherwise.
Work with Venture-Focused Legal and Finance Experts to Define the Structure and Understand the Numbers Working with venture-specific legal and finance teams is important because they'll have the contextual perspective to understand the nuance required for creating sustainable venture studio models. This not only ensures compliance and financial stability but also arms you with a deeper understanding of the nuanced financial and operational aspects of your studio. There's also the added benefit of aligning the structure with your vision and thesis in a more cohesive way, enabling you to create a strong foundation that supports your long-term goals. Also, be sure to be actively involved in this process with venture-specific experts; they can properly educate you on the context and complexities to more deeply understand them, thus enabling you to speak to these topics without an issue. Clearly articulating the operational structure, revenue streams, return strategies, and liquidation plans not only instills investor confidence and increases the likelihood of investment, but also ensures a strong foundation for your venture and helps you make informed decisions and adapt to changing market dynamics.
Add Earlier Gates for Validation (You Don't Have to Wait for for "Product Market Fit") Prioritizing discovery and validation allows you to thoroughly understand the market landscape and identify unique opportunities prior to working toward validating product market fit. But by setting an earlier gate for validating that potential problems and solutions are worth pursuing, you not only encourage a deeper exploration of the problem space, which can lead to innovative solutions and new business models, you also establish an early point in the ideation phase for determining to pursue or kill off an idea before investing too much time, energy, and resources. This lowers your initial investment prior to the event validating product market fit. There's also the obvious benefit of conducting more thorough research upfront; this not only helps you stand out amongst competitors but also provides a deeper understanding of customer needs, enabling you to tailor your offerings and create a compelling value proposition sooner.
If you know your tam sam som and the personas of your paying customers clearly you have understood a lot about your business. Immerse yourself in your industry and target market and segments deeply and clearly. In an early stage, a lot of startups rely on a few instances and should always capture and validate findings with a larger set of users. Understand their needs and desires. Identify and outmaneuver competitors. Weave user journeys and experience mapping into your DNA and engineer magical moments that turn users into loyal customers. This itself becomes the premise for your story which can convince stakeholders including the VC.
Trying to get stand out to raise funds for your studio fund: identify an industry that is about to get killed by AI and work out what unique human capabilities they have - offer those people a life boat of a dedicated studio. Rest of the studio capabilities are non differentiated. Bring talent and investment from those industries into your VS
If the investor indicates a reluctance to invest, whether it's conveyed during a call or through email, make it a point to ask for feedback, especially if the reasoning is general. Identify specific areas where improvement is needed and inquire if they would like to receive updates on the company's progress.
Creation of a community for overseas students and alumni
I am a migrant Entrepreneur out here in the UK (born and raised in India). Navigating the UK startup scene can often seem challenging, especially for overseas students and alumni. Challenges such as limited professional networks, lack of financial support from friends or family, cultural barriers, and work permit restrictions are among many others. Me and my mate Mo (born and raised in Egypt) underwent the VCLab's Venture Institute program and saw that the community has a lot of power, so decided to kickstart a UK-wide support network initiative with a mission to make entrepreneurship more accessible to overseas students and alumni across the UK innovation ecosystems. In less than a week, we have built a community of more than 50 students and researchers, with representation from 6 nationalities and 5 UK University cities in the community. This clearly showcases the power of community and will create an investment syndicate where future entrepreneurs from outside the UK could help support the coming generation of students and researchers in their entrepreneurial and new venture creation pursuits.
Through Supporting startups to become investible by building their sales processes and teams I'm looking at support for startups within a VC in building a strong sales organization. A sales organization that will be sustainable and develop year after year, organically, in harmony with the market - however the market may sway. An adaptive and lean team that aligns beyond technical skills, that works together like drops of water in the ocean.
When reaching out to VCs for fundraising, carefully research their investment theses and target stages to create a tailored list. Focus your outreach on funds that actively invest in startups like yours at your current stage. This targeted approach will streamline efforts and help in efficient early raise.
I'm starting a Venture studio. Have a deep industry background but not the same strong network towards LPs and the venture world. My "hack" is to meet and talk to as many people as possible within the venture field asking advice, learning, and getting to know people. Joining things like the Venture studio Family, Venture Challenge program, talking to incubators, etc. People are usually more than willing to share their knowledge if you convince them you are just curious to learn and not trying to sell something.
According to studies the first 15 seconds of a meeting are the most crucial, that's when a person judges you based on your appearance and body language. It's really important to have good posture, shake hands firmly, make direct confident eye contact, and provide full attention to the person you're meeting to highly enhance the chances of a successful meeting. This boosts charisma and allows the other person to build trust which fosters meaningful outcomes.
More ideas, tips, and recommendations
Innovation Market Research Tool - TurboInnovate. Trusted by the US Air Force and thousands of others. Helps with Fundraising, Deal Flow Creation, and Investment Decision-Making.
Get your accounting/books in order. We did a lot of due diligence projects where profit could flip to loss because of wrong accounting.
Facilitate discovery sessions tailored to support founders, startups, and tech teams.
Don't make your presentations too "Perfect", show authenticity to the investors that you're just a normal individual who can make mistakes too.
Create value in emerging countries combining both frugal and cutting-edge innovation.
Bootstrap work hard and wait a long before you get in touch with a VC.
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