The Helpful VC (June 2019)
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The document outlines strategies for venture capitalists to enhance their branding, marketing, fundraising, and deal flow by focusing on their unique value propositions. It emphasizes understanding both portfolio companies' needs and the competitive landscape in order to position oneself effectively in the market. Additionally, it provides frameworks for building relationships with companies, crafting compelling pitch decks for fundraising, and evaluating investment strategies.
![Fundraising: Key Slides in Your Pitch Deck
Core Deck (10 slides)
● Cover: Name / Brand / Image
● Thesis: Basic Fund Concept + Goals
● Team: Bios / Academic / Work Experience
● Track Record: Prev Portfolio / Top 3 Deals
● Superpower: Services / Value-Add
● Competition: Differentiation / SWOT analysis
● Dealflow: Marketing / How to Get Deals
● Selection: Criteria / DD / Process
● Fund Model: [spreadsheet]
● Capital: AUM / Current LPs / Fundraising
Appendix Slides
● Investment Thesis / More Details
● Winners / Case Studies (1 slide per win)
● Team Bios (1 slide per GP)
● Advisors / Mentor Network profiles
● Examples of dealflow-generating activity
● Sample Deal Memo
● Fund Terms / Legal
* emphasize items in blue if you have “hot”
thesis, pedigree, experience, track record
* emphasize items in red if you don’t](https://image.slidesharecdn.com/thehelpfulvcjune2019-210707152747/85/The-Helpful-VC-June-2019-8-320.jpg)
The Helpful VC (June 2019)
- 1. The Helpful VC How to Position Your Unique “Value-Added” Superpowers for Better Branding, Marketing, Fundraising & Dealflow Dave McClure June 2019
- 2. How You Help -> Brand + Competitive Positioning YOU (THE AWESOME VC) ● What you can do (well) ● What you do better / different ● What you promote / promise (your brand value) TARGET PORTFOLIO COMPANIES ● What they want ● What they need ● What makes a difference COMPETING INVESTORS ● What they say they can/will do ● What they actually can/will do (well) ● What they do that really matters
- 3. Investment Thesis ● What Kind of VC do you want to be? ○ Stage, Geography, Industry Vertical ○ Fund Size, Check size, Follow-on ○ Lead rounds? Board seats? ● Why You? Are you sure you can do this? (3X / 20%) ○ 1) can you raise money? ○ 2) can you get dealflow? ○ 3) can you help companies? how? Q: Are there competitors with a similar thesis? Why are you different / better? Why will great companies come to *you* instead of other competitors?
- 4. VC Dealflow Funnel ● Thesis: what/how you plan to invest ● Brand: use your value-add to attract companies ● Marketing: activities that generate dealflow ● Evaluation: filter dealflow *before* taking mtgs ● Meetings: in-person evaluation & DD Qs ● Deal Memo: document deals you want to do & why ● Negotiation: specify terms and make / close offer ● Investment: wire the money! ● … ● … (then wait 7-15 years) ... ● … ● OMG UNICORNS! BRAND + MARKETING DEALFLOW EVALUATION MEETING DEAL MEMO TERM SHEET INVEST! THESIS “VALUE-ADD” UNICORNS! (hopefully)
- 5. Branding & Marketing: How to Generate Dealflow ● Brand: what’s your name / logo / soundbite / unique value proposition? ○ What’s the story you’re going to tell the market? ● Superpower: what makes you special / why are you different? ○ Is there something you can do that will make companies come to you? ● Marketing: activities / communications to LPs, founders, press, etc ○ Content: writing/blogging, speaking, training ○ Services: are there services you can provide to startups to generate interest? ○ Founders: where do the founders you want to invest in hangout? FIND THEM! ○ Networking: who do you need to know in the industry? VCs? Scientists? Partners? ○ PR strategy: who can help generate news about you / your firm / your strategy? ○ Events & Conferences: should you speak / attend industry events? Should you run events? ○ Online Platforms / Other Investors
- 6. Help Framework: Why, Who, When, What, How? ● Why Help Companies? ○ Just help them win! (goodwill) ○ Help them with something you’re good at ○ Find out how they are doing (metrics) ○ Build your reputation -> better dealflow ○ Earn right to participate in future rounds ● Who Should You Help? For How Long? ○ Only Winners? Everyone? Even Losers? ○ Until next round? Forever? ○ Until they “win” (or FAIL to win...) ○ Board Seats / Advisor seats? ○ Define when / how you will pull the ripcord ● Define your “Help Framework.” ○ What will you do? ○ Who will you help? ○ For how long? ○ Until something happens? Or forever? ○ Tell them what you expect to get back ● What is Your Unique Help Superpower? ○ Product Development ○ Marketing/Sales ○ People/Recruiting/Hiring ○ Operations/Process ○ Raise More Capital (*not unique)
- 7. Limited Partner Profiles/Issues Types of LPs ● Institutional ○ Pension Funds ○ Foundations / Endowments ○ Financial / Insurance Companies / Banks ○ Corporates ○ Government / Community ● Private ○ HNW Individuals (“High Net Worth”) ○ Family offices (SFO, MFO) ○ FFF (Friends, Family, Fools) ○ You, Your Dog, Your Cat. Issues for Potential LPs ● Asset Allocation ○ Equities, Bonds, Cash, Real Estate, “Alternatives” ○ Alternatives = Hedge Fudns, PE, VC, etc ● Time-horizon / Liquidity needs (short vs. long) ● Investing Motivations ○ Pure Economic Returns (perception vs reality) ○ Strategic (innovation/IP, M&A, people, product) ○ Access to Dealflow (industry vertical focus?) ○ Economic Development (Jobs, Ecosystem) ○ Marketing/PR (“It’s cool to invest in VC/tech”) ● Have they invested in VC funds before? ● Have they invested in startups before? ● Interest in Emerging Managers / Early-Stage?
- 8. Fundraising: Key Slides in Your Pitch Deck Core Deck (10 slides) ● Cover: Name / Brand / Image ● Thesis: Basic Fund Concept + Goals ● Team: Bios / Academic / Work Experience ● Track Record: Prev Portfolio / Top 3 Deals ● Superpower: Services / Value-Add ● Competition: Differentiation / SWOT analysis ● Dealflow: Marketing / How to Get Deals ● Selection: Criteria / DD / Process ● Fund Model: [spreadsheet] ● Capital: AUM / Current LPs / Fundraising Appendix Slides ● Investment Thesis / More Details ● Winners / Case Studies (1 slide per win) ● Team Bios (1 slide per GP) ● Advisors / Mentor Network profiles ● Examples of dealflow-generating activity ● Sample Deal Memo ● Fund Terms / Legal * emphasize items in blue if you have “hot” thesis, pedigree, experience, track record * emphasize items in red if you don’t
- 9. EXAMPLE: Wingnut Investment Fund Wingnut Ventures ($20M seed fund) ● Stage: seed investments + some follow-on at Series A/B ● Vertical: internet-connected hardware/software devices ● Geo: US-centric (mostly US tech metros, some non-US) ● Allocation: 40 seed checks @ ~$250K + 10 Series A/B @ ~$1M ● Lifecycle: 10 yr fund + 2 x 1yr extensions; 5 yr initial investment period ● Reserves/Recycle: 50% 1st checks + 50% follow-on; recycle up to 120% ● Fees/Carry: 2% avg mgmt fees, 20% carry (after 1X returned) ● Team: 1-2 partners + 1-2 associates + 0-1 admin
- 10. APPENDIX
- 11. Distribution of Investment Outcomes Source: Correlation Ventures (2014).
- 12. Portfolio Size vs. Returns; Likelihood of “Outlier” Sources: left panel, Steve Crossan; right panel, Clint Korver
- 13. Portfolio Construction / Fund Model Spreadsheet model that calculates returns (gross/net TVPI) based on several factors: ● Fund size ($) ● Portfolio size (#) ● Check size ● Reserves / Recycling ● Valuation / Dilution ● Size / Frequency of Exits ● Timing of investments ● Timing of distributions Fund Model Decision(s) Framework ○ Ownership vs. Diversification (equity vs. portfolio size) ○ First Check vs. Reserve Allocation (should i follow-on / how much / when / why?) ○ Frequency / Pace of Investment (how fast to deploy capital) ○ Outcome assumptions: probability & distribution of exits (how big? how often?) ○ Timing of investments, exits, recycling, etc.