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I spent my first year developing proprietary dealflow and learning the business and then the Sept 2008 / Lehman Bros collapse / financial meltdown happened. “Ok, so this guy can write a blog and source deals but can he make any money?” I become a venture capitalist in September 2007 – exactly 6.5 years ago.
This sets the stage perfectly for a completely open conversation. I believe that these calls have two very significant benefits that make them good sources of dealflow. The conversations tend to be very candid and opinions are shared freely. It was a back channel reference. Selling puts people on the defensive.
If you track the venture capital industry it would be hard to miss the conversation going on this week over AngelList “Syndicates.” AngelList 101 : As you know, AngelList is a platform where angels can invest in semi-screened tech deals. Social proof can be helpful. But it can also be destructive.
If a conversation happens between the CEO and each director then each side knows what we’re trying to achieve with the in-person meeting. A director who hasn’t had a pre-conversation with management will not be as effective in the board meeting. I sometimes view it as my role to drag other people into the conversation.
It is the new cocktail party conversation. Note: If you’re new to angel investing you may be interested to read my series on what I believe it takes to be successful – each of these links is an article: Access to the Best DealFlow , Domain Knowledge , Relationships with VCs , Deep Pockets , Access to Buyers.
You never got around to agreeing exact equity splits but you had many conversations about it. I find that one of my best sources of dealflow is from lawyers. So eventually you have your company funded but only 2 of the 5 people who started the company are still around.
Software businesses have a conversion problem that’s both getting worse and going mostly unsolved. Though the topic of mobile conversion rates of ecommerce websites is often broaches, it’s rare we talk about SaaS or B2B. Mobile traffic’s conversion rate is, at best, a third of desktop for software businesses.
Now that there are so many new companies started, so much money in the ecosystem, and new types of funds out there, deal velocity is increasing. To find signal in all the noise of that dealflow stream, “who” the source is certainly matters. But, then again, introductions can be a dime a dozen.
Software businesses have a conversion problem that’s both getting worse and going mostly unsolved. Though the topic of mobile conversion rates of ecommerce websites is often broaches, it’s rare we talk about SaaS or B2B. Mobile traffic’s conversion rate is, at best, a third of desktop for software businesses.
In exchange, these VCs/companies get early looks at new dealflow and offer aspiring entrepreneurs feedback and advice on their business plan. For those of you who don’t know, business plan competitions are held by universities who get their students to enter and compete to see who has the best business idea.
So my advice boils down to these simple points: Make sure you see tons of deals. Don’t rush to do deals. Almost certainly the quality of your dealflow will improve over time as will your ability to distinguish the best deals I also am personally a huge fan of focus.
DealFlow I often talk about how I think the best VCs “ play offense ,” by which I mean proactive go out and find a market segment or niche that they uniquely know, can uniquely serve or have some other natural advantage and go out and find deals you like. Dealflow and winning will drive change faster than any other outcome.
Over the past month, Silicon Valley has been at the forefront of many conversations outside of the technology world. This tends to reinforce the lack of diversity in dealflow. Unfortunately not for groundbreaking technology, but for rampant sexual harassment and predatory behavior.
A true industry luminary will help in dealflow & differentiation . These folks are rare, expensive, and often have multiple side obligations (book deals, speaking engagements, etc.). Build a network of on-call domain experts, who will have short conversations with portfolio management, typically at no cost. .
Several conversations over the last month have turned to the topic of helping entrepreneurs. Those folks may be hired in vertical specialties, and the larger and more successful incubators have enough dealflow to keep their agendas filled. As you probably know, I prefer advising founders in long, immersive engagements.
She answered, ‘We see a lot of deals.’ I said we had a lot of dealflow. Chris Dixon, Partner, A16Z, observes , “Success in VC is probably 10% about picking, and 90% about sourcing the right deals and having entrepreneurs choose your firm as a partner”. Kushim manages your dealflow and track portfolio performance.
Part 1 – Access to Great DealFlow – is here. Most people think that being a successful investor is about finding the right deals and nurturing the teams through the difficult times to come out with a great company. This is the fifth & final (I promise!) Access to buyers – I saved the least obvious for last.
When you get a Chris Sacca, or a Dave Morin, or a Chris Dixon on board first, it’s going to lead to a lot of dealflow.&# Vaynerchuk’s deal breakers include entrepreneurs who lack passion, ideas that are “10 minutes too late&# and ideas that aren’t mainstream enough.
I don’t think it matters what the obligation is — but rather — it’s an opportunity for the founders to supply their most passionate early supporters with information and ammunition to infuse into our conversations with downstream investors, potential candidates, and potential angels and BD prospects.
Might as well cut off our conversation and just restart it 48 hours later on camera for This Week in VC. I believe AngelList is capable of managing dealflow by acting as a filter. I personally like meeting teams very early on and wish I could get more proprietary dealflow from it. So I thought, WTF?
The best introductions come from people who have brought good dealflows to investors in the past. Only comment when you’ll be adding value and relevance to the conversation. Identify the strongest “in” to the particular investor. This often means not jumping on the first person who can introduce you.
VCs are triaging their own incoming dealflow, traveling, or are booked up on their calendar for the next couple weeks. Peace of mind in that an entrepreneur shouldn’t worry early-on that a term sheet isn’t forthcoming after one conversation.
The result of this conversation should be complete clarity regarding the opportunities and challenges the partnership will bring. Worst case scenario in the partner’s’ eyes: “lack of transparency and lack of dealflow and lukewarm leads that never turn into anything.”. Is there market appetite for our joint offer?
Building out your own network of other Angel or Seed investors increases the quality of your dealflow. Getting you into better deals, and potentially on better terms. And that alone should be worth the effort of a few conversations and phone calls. In addition to that very few startups only raise once.
The result of this conversation should be complete clarity regarding the opportunities and challenges the partnership will bring. Worst case scenario in the partner’s’ eyes: “lack of transparency and lack of dealflow and lukewarm leads that never turn into anything.”. Is there market appetite for our joint offer?
As for the percent of my dealflow that is BIPOC, I would say maybe about 20% or so, but I’m honestly not sure, since I don’t intentionally look up any photos as part of the initial pitch process and not everyone includes them. This is lazy, sexist, and racist—and also stupid because it has no provable impact on dealflow quality.
Incubators take pride in how exclusive they are and how many "deals" they "reject." Angels and VCs, of course, discard most of their "dealflow." I have had numerous conversations with Sridhar over the years, and each time he reinforces the same basic philosophy: "I want to build this without outside capital.
If you have a strong relationship with a founder that a VC has backed, that is usually the best intro you can get to kick off conversations with the investor. Speaking to founders that an investor has worked before tends to work best at the very beginning of the process or right at the end.
FUND is a national connector of entrepreneurs, VCs, angel investors, and industry experts with a focus on dealflow and making connections. The conversation around kids and technology is relevant and rising. The Austin conference was the inaugural Texas event after several successful Chicago FUND Conference events.
Yesterday, I sat in a conversation with a potential investor in Brooklyn Bridge Ventures and he asked me "How do you get dealflow?". To be a good VC, you're going to offer up a lot of time to companies that may never pay back a dime--or even to deals you never wind up doing. There's no magic flow of great dealflow.
Not a one—and through conversations with other seed funds I know, this is pretty widespread. Not only that—these people are doing all sorts of different kinds of deals—and you don’t do deals without dealflow.
Before CardMunch even launched its product, I ran into some folks from LinkedIn at an event and in casual conversation mentioned what CardMunch was trying to do. Again a casual conversation transpired. It’s a simple density/dealflow issue.
You can follow this conversation by subscribing to the comment feed for this post. I've not studied them yet, but at first glance I can see some really slick technologies being transferred into a Newco with these basic terms, and funding a lot more dealflow. TrackBack URL for this entry: [link]. This is great!
If you’re trying to break into venture, the top recruit is expected to hit the ground running—to already have dealflow because they’re regularly talking to top performers. What good is hiring someone whose only conversations with rising stars happen because they just joined a fund?
Before CardMunch even launched its product, I ran into some folks from LinkedIn at an event and in casual conversation mentioned what CardMunch was trying to do. Again a casual conversation transpired. It’s a simple density/dealflow issue.
At a minimum, IWD and the organizations and individuals celebrating it will spark action, continue existing conversations, and force new ones. The idea there is that “the dynamics will change when capital flows equally to any talented founder, no matter his or her gender, race, sexual orientation, or any other characteristic.”
It’s also been fun – a great way to get close to new managers, build lasting personal relationships, and see dealflow for our Foundry Group investing activity. The conversation around AvidXchange brought to light the magnitude of the opportunity we have to invest in interesting companies outside of our early stage portfolio.
Is it better to avoid the subject or to have those difficult conversations? I know I get dealflow because founders want an investor who is going to be direct and tell them what they think—about anything. In fact, I know it has.
that’s a full third of our dealflow in our first full year of operation. The money is flowing in Dallas too?—?our Capital Factory Doubles Down on Houston was originally published in Austin Startups on Medium, where people are continuing the conversation by highlighting and responding to this story. It’s working?—?40
Crave Retail (Austin, TX) Matthew Cyr, CEO Crave is a SaaS platform purpose-built to enhance the fitting rooms of premium enterprise retailers with modern digital experiences and analytics to optimize conversion opportunities. Investors connect with Techstars to gain access to quality dealflow.
He’s also the founder of Converse Digital , and he’s got a new course that he’s been working on called Turning Conversations Into Customers: The Sales Prospecting Method for People Who Hate Sales Prospecting. Everybody always says it like converse, like the tennis shoes, so thank you for that. Tom Martin: Hey.
If you start a new fund, you need to be clearly differentiated: what’s your unique insight into a specific opportunity, your unique network that generates dealflow, your unique value proposition that gets you into deals? Too many funds are still pitching themes that aren’t fresh (e.g. generalist focus, operator background).
We’ve heard this trope below, but the data does show it and in the last year, this is what I’ve observed — it’s easy to the pre-seed round, but then folks line up to pitch the best seed funds, but those seed funds are drowning in dealflow from the pre-seed funnel.
“When I look at Index, Danny, Jan, Mike, Shardul or myself all have very different superpowers and ways to go about our jobs - but the one thing we have in common is the output of having been in the right conversation at the right time and pulling the trigger on some big decisions when they weren’t obvious or consensual.”
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