Short Description By becoming a true expert you will have other experts refer deals to you. And people who are not experts will also send deals in that field to you. The trick is to pick a field that will be relevant to investing and where you can develop true expertise. You may already have […]
Read the postThe almost universal revenue model for a VC firm is fees plus a share of the profits. Firms charge “management fees” as a percentage of assets on a quarterly basis. GPs share in profits (called “carry” or “carried interest”) when the fund sells stock. Fees cover current expenses for the fund and employees. As an […]
Read the postShort Description Universities are often the nexus of new research, insights and talented people. By connecting with the university community, you can tap into this for dealflow. Or you can catalyze companies that might not exist otherwise. Examples of tactics are: sponsorships teaching formal programs with the tech transfer office spending time on campus (hosting […]
Read the postShort Description Outbound strategies are when a VC firm, without prior contact, reaches out to a company to explore making an investment. It is called “cold calling” or “outbound origination”. When firms commit to oubound they set volume goals and can dedicate staff. Like an outbound effort in a startup, there are distinct phases to […]
Read the postShort Description A wonderful way to find high-quality referrals is from existing portfolio companies. In the Founder-as-Customer Frame, these are the word-of-mouth leads that are so valuable to a business. Benefits High Quality Leads: Your current portfolio is more likely to associate with high potential founders. (And if for some reason they are not, you […]
Read the postPotential LPs in a venture fund ask themselves and wonder about incentives. How can I align interests with the fund manager to reduce the principal-agent problem? How can I ensure that that GP will be focused on stewarding my capital and taking appropriate risks to generate returns? A classic answer is to seek to invest […]
Read the postWho is the customer for a venture capitalist? A simple question with profound implications. You will want to agree with your firm about the answer. The two most common answers are: LP: investors in the VC fund are the ones that pay the fee and carry and so they are the customers. Startups and founders […]
Read the postA simple yet powerful mental model. You make money in venture capital by investing in companies that are not popular but are successful. There are a number of ways to be non-consensus including being first to know about a company, or investing in a company that others actively dislike or by investing in a region […]
Read the postRace “In 2015, there were 12 black women who had raised more than $1 million in funding, according to Digitalundivided’s new ProjectDiane report. In 2017, there were 34.” “Latinx women are over 18% of the population of women in the US, but they lead less than 2% of women-led startups.” “We found that 79.2% of […]
Read the postRace “One study by HBS found Black investors made up less than 1% of the industry in 2016 (0.32%). Other sources estimate the percent of Black investors has only increased by 1% in the past two years.“ “81 percent of VC firms don’t have a single black investor. Roughly 50 percent of black investors in […]
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