Index Ventures’ Danny Rimer: ‘The talent is what’s going to drive the difference’ Danny Rimer invests in people, and he's one of the best. In this article, he discusses his interview process, which emphasizes evaluating individuals based on their learnings, contributions, future aspirations, and potential impact, rather than just their past affiliations or successes. This approach values people from both winning and losing companies equally, focusing on their growth and potential. VCs invest in people, the founders. The next round of investors will also be investing in the next group of people who grew out of that group, and so on. It's always the same story: a company fails because of what someone did, or it succeeds because of someone’s actions. Founders: People Funding: People Design: People Dev: People GTM: People PMF: People Decent exit: People 1000X exit: People At every turn, founders will be making tough decisions about human capital, just like VCs make investment decisions based on people. Taking leaps of faith, hiring too fast, hiring too slow, putting pressure on prematurely, giving bad direction, and not communicating effectively. These decisions will be among the hardest lessons, and being wrong about someone can shake confidence to the core. It’s crucial not to "wing it" when it comes to people problems. Losing with one person might be manageable, but losing with another could be far more costly. Conversely, hiring the right person can lead to success, and hiring an exceptional person can multiply that success exponentially. Read the article here. https://buff.ly/3L9fdeY Index Ventures #venturecapital #interviewing #talentpartner
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Venture Capitalist, Robert Antoniades reveals the factors he considers when evaluating an investment round and highlights the qualities that set Founders apart in today's competitive business landscape. #LeadershipInsights #VentureCapital #Recruitment #Hiring #TechStartups
Investor Insights with Robert Antoniades: What Sets Founders Apart
mbassett.com
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The VC landscape has evolved to a strange place where acute decisionmaking or extremely delayed decisionmaking is the norm and this is really bad for everyone involved. Let me explain... When a startup goes to raise money and has both sophisticated founders and a good idea, they can usually get looks from VCs and angel investors. Now most of the time, VCs and angels will say "it's too early for us" which may or may not be true, but is a nice way of not having to tell founders their idea is bad. But once a founder gets an investment offer (especially from a well-known VC), other investors are now forced to do rapid Due Diligence because in order to get in on the deal they have to make an offer that's competitive and quick. This is bad for the ecosystem and as a Yoko Okano once mentioned, "investors can act like lemmings". The lemming behavior leads to lots of offers on pre-product startups that may or may not work out. Acute decisionmaking is the exact opposite of what early stage investing should be. Watching how founders react to adversity and how they adjust their product and GTM strategy can tell you a lot about their ability to build and grow a company. The other thing that occurs is when investors aren't forced to make a decision and instead wait and wait and monitor because there's no pressure. As far as this approach goes, I'm not an advocate for waiting around for 6 months to cut a $25k check into a pre-seed company. The takeaway is that investors need to have principals and stick to them and that FOMO as a reason to invest is a dumb one. You need to be contrarian and right which requires not following the crowd.
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Some good thoughts on the often not discussed topic of the value of capital from a tier 1 investor!
'Does it matter if I raise from a Tier 1 VC?' I've answered this question in various forms 3 times in the last 2 weeks from founders who have term sheets in hand. Sharing my advice here as I think it could be helpful to other founders. ❓Firstly: does tier 1 vs tier 2 or 3 make any difference to your trajectory? Yes it does - even without any pro-active value-add from the VC. VC brands are extremely valuable. VC is one of the few asset classes where there is a persistence of returns between funds (even when the partnership changes). This suggests the brand of Tier 1 VCs can lead to a virtuous cycle of the best deal flow and therefore the best returns (Link to study in comments). This signal from a tier 1 fund inevitably drives more inbound investor interest. AngelList Talent also contributed to a study which showed startups with top tier investors attracted significantly more job applicants than those without. (link again below in the comments). 📃 Secondly: If you have multiple term sheets should you optimise for quality of VC or terms? This is very founder / startup dependent... but assuming all the term sheets have similar 'control' provisions my response is best summarised by Jason M. Lemkin: 💰 'Tier 1 VC is great. But more money is may be even better.' One of my portfolio companies had a $12m difference in valuation for Series A term sheets last week. The tier 1 had the lowest, and a tier 3 had the highest. But the higher valuation of the tier 3 meant the founders could raise considerably more capital with similar dilution. If you can raise 25% more capital a lower tier VC - I'd take that option every time. Importantly: no investor will make or break your company... the impact they have will be negligible when compared to your team.
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I’ve angel-invested in around 20+ companies in the last 4 years. 30% of them failed. Here are 3 lessons that I learnt in this journey 👇 1/ 𝐅𝐨𝐮𝐧𝐝𝐢𝐧𝐠 𝐭𝐞𝐚𝐦 𝐢𝐬 𝐚𝐬 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐚𝐬 𝐭𝐡𝐞 𝐢𝐝𝐞𝐚 In the initial stages of my investing journey, I overlooked the potential of the founding team and invested solely in the idea. Over time, I realised that the best business idea is equally as important as a strong founding team. A talented and committed founding team can overcome multiple obstacles, while 65% of startups fail due to co-founder disputes. 2/ 𝐍𝐨 𝐞𝐦𝐨𝐭𝐢𝐨𝐧𝐚𝐥 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧 𝐦𝐚𝐤𝐢𝐧𝐠 Previously, I often found myself overwhelmed with information, leading to emotional decision-making. Now, I prioritise confidence in the startup's growth above all else. Here's my approach to evaluating a startup's growth potential before investing: ✅ What is the size of the market for the problem statement? ✅ Can the idea potentially lead to a 20-50x venture outcome? ✅ Is the founding team capable of moving swiftly with both structure and speed? 3/ 𝐁𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐭𝐡𝐢𝐜𝐤 𝐨𝐟 𝐭𝐡𝐢𝐧𝐠𝐬 As an angel investor, create an investment process alongside your investment. This way, you can understand what the founder is up to and how you can add value to their venture. Don't just make investments. Lay the groundwork for a firm-founder relationship. -------- 👉For first-time angel investors, it can be a journey of excitement, uncertainty, and a lot of new learnings. Be ready to learn, adapt, and evolve. Regardless of whether the startup succeeds or not, you’ll see yourself growing! #investment #angelinvestment #investor #angelinvestor
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In the dynamic startup landscape, founders frequently overlook the necessity of realistic exit strategies, which can be detrimental to their company's long-term success. Founders must consider crucial questions, such as: What happens in the event of success or failure? What is the financial threshold that would compel them to either persevere or walk away? How much are they willing to continue to pour into a company that is struggling when things get tough? How big of a check will they accept to hand over their blood, sweat, and tears?
A founder’s guide to the differences between working with private equity and venture capital firms
https://fastcompanyme.com
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Inside Creative Ventures' Winning Strategy 🚀 Want to know how to attract the right investors consistently? Meet Creative Ventures. 🤝 Their unique approach combines market savvy, a commitment to excellence, and a focus on practical, real-world tech solutions. 🔍 From deep market research to an all-star team of financial experts, operators, and tech wizards, Creative Ventures knows how to spot and seize the right opportunities. They're not just about ideas; they're about action and results. 🔑 Champ Suthipongchai, General Partner at Creative Ventures, shares his expertise in balancing risks and rewards, understanding market dynamics, and fostering resilience, which is invaluable for entrepreneurs in the deep tech sector. Watch the full interview here: https://lnkd.in/eD4tQbCQ 📈 Whether you're an entrepreneur, investor, or just interested in the venture capital world, these insights are invaluable. Read the full article on the investment battle this Friday! #CreativeVentures #ChampSuthipongchai #VentureCapital #BusinessStrategy #Crowdfunding #InvestmentOpportunities #StartupFunding
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🚨 Avoiding Red Flags in Angel Investor Funding: A Startup's Cautionary Tale 🚨 As entrepreneurs navigating the startup landscape, we recently encountered a few red flags while in talks with angel investors. Sharing these lessons to help fellow founders dodge potential pitfalls in the funding journey: 1 Beware of Partnerships Over Investments After extensive due diligence, some investors pivoted, pushing for a partnership with a board seat rather than a straightforward investment. Founders, stay vigilant about aligning intentions and goals. 2 Investment Experience Matters If your angel investor lacks seasoned investment experience, it could mean endless negotiations and a steep learning curve. Money doesn't always equal expertise; choose investors who understand the startup ecosystem. 3 Demand Past Investment Details Always inquire about an investor's past investments, exits, and overall experience. It's your right to know about their track record with other founders and companies. 4 Conduct a Thorough Background Check Dig deep into your investor's background—industry experience, relevant skills, and potential contributions to your startup. Insights from past connections can be invaluable in making an informed decision. 5 Closely Monitor Intentions in Term Sheets Watch for changes in terms, of persistent control demands, or attempts to involve family and friends excessively. If an investor's intentions seem unclear or controlling, it might be a red flag. 6 More Than Money: Value Beyond Funding Look for investors who bring more to the table than just funds. Can they facilitate client connections? Provide marketing insights? Seek partners who add substantial value beyond financial backing. 7 Insist on Signing Shareholder Agreements Don't compromise on the legalities. Ensure your investor is ready to sign shareholder agreements or convertible notes, reflecting their commitment to your startup's success. 8 Don't Celebrate Until the Money Arrives Investor commitment doesn't guarantee funds. We learned the hard way—don't trust until the funds hit your company account. Keep exploring options and stay cautious until the deal is sealed. 🚀 Founders, let's share experiences and insights to empower each other in this journey! What red flags have you encountered in fundraising? Comment below! #StartupWisdom #AngelInvesting #FoundersJourney 🌐💼
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The Founder Advisor™ | Founder of Practice Fusion and 100Plus | Venture Advisor @ AI Fund | World Economic Forum Technology Pioneer | Business Times 40 Under 40
I've raised $250M, and here's what you need to know before accepting venture capital: 1. Implement a no asshole rule. Investors on your board can range from being distractions to actively destroying value. For example, my board member Becky would constantly demand updates, visit unannounced, and engage my team without informing me. These are red flags. You don’t want an investor like Becky. 2. Avoid conflicts of interest. Ensure you are the sole company in your category within their portfolio. If an investor has already backed a competitor, everything you disclose could end up in the hands of your rivals. 3. Always check references by contacting other founders directly, bypassing the investor’s curated list. This direct approach often yields more genuine feedback. 4. Inquire about their history with founders, specifically how often they replace them. This will help you understand their approach to supporting founders versus hiring external CEOs. It’s best to ask this when you have a term sheet and they're about to join your board, not at the first meeting to avoid looking problematic. 5. Two key investor traits are crucial: choose a partner over an associate and someone with operational experience over merely academic qualifications. Startups face volatile situations where a seasoned partner’s clout and experience can be critical. Associates, less proven and under more pressure, might be too overbearing during challenging times. 6. An MBA who has never managed a company might lack the practical wisdom to provide effective support during pivotal moments. A partner who has previously managed businesses is your ideal investor, combining strategic insight with practical experience. If you have any questions about finding and working with investors, or about entrepreneurship in general, feel free to leave a comment below. Check out my latest content on TikTok: [https://lnkd.in/e5Uzqprq). #venturecapital #venturecapitalist #vc #vcs #founder #startup #startuptips
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This Forbes article highlights important questions that all founders should consider before approaching investors. There's a lot to cover! We work very closely with our founder clients to ensure that they are absolutely investor ready when researching and approaching investors for their businesses. Fundamentally, our clients will all demonstrate 5 Key Attributes when our experienced partners get involved with supporting founders on their journeys... - There will be a 'Big Idea' - A clear proof of demand - A plan to scale - Founders and management who can deliver - Comprehensive, but simple, financial model Being prepared for a thorough evaluation by any investor is essential - this article has some great examples of questions, covering all aspects of an early-stage business... #earlystageinvesting #startupfunding #entrepeneur #vcfunding #angelinvesting
Evaluating Early-Stage Startup Potential: 33 Key Questions Investors Ask
forbes.com
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When and How To Say No 𝗔𝘀 𝗔𝗻 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿 Investors say NO 99 out of every 100 pitches they receive. But let’s face it, most investors are bad at it. And startup founders end up: 🔻 Ghosted 🔻 Confused 🔻 Frustrated Here’s how you can say NO while giving advice: ▶ When founders have no skin in the game: "A stronger commitment from the founding team, in terms of personal investment, is needed for the success of this venture.” ▶ When the numbers don’t make sense: "I encourage you to revisit your numbers and consider adjustments that could make your proposal more viable for investors." ▶ When the product isn’t good enough: “At this stage, your product may not yet be ready for the market. Focus on refining and enhancing your product to improve your chances in the future." ▶ When the Product-Market Fit is unclear: “I recommend exploring how you might adapt your product to more closely align with market needs." ▶ When it doesn't align with the Investment Thesis: “We are focused on [specific sectors or types of investments], and we believe it's important to stay consistent with our investment strategy." I know we don’t have time to respond to all of them but it won’t hurt to give some advice or reasoning as we reject some of these aspiring founders. You never know when they might be a good investment for you in the future. Or the impact you may have on their development as founders. Image was taken from Chris Donnelly’s post 👉 https://lnkd.in/gbqi94KE #investing #venturecapital #strategy #innovation #technology #startups 🔔 Curated content for investors - trends, insights, and resources.
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