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Venture Capital

Gain leverage by raising cheap capital.

Raising Capital​

Everyone involved with a business is an investor of some sort:

  • Leaders invest their time and energy selling stories the drive momentum and steer direction
  • Everyone the earns money from the business invest their time in energy to committing their unique talents
  • Customer invest their money, time and energy to get up to speed with a product
  • Capital investors invest belief and liquidity in ideas until they hit a critical mass of adoption.

Business Model Alignment​

  1. Scalability: Does your business have the potential for rapid, exponential growth?
  2. Market size: Is your target market large enough to support venture-scale returns?
  3. Exit potential: Are there clear paths to a lucrative exit (acquisition or IPO) within 5-10 years?

Founder Goals and Readiness​

  1. Growth ambitions: Are you aiming for rapid expansion rather than steady, organic growth?
  2. Equity dilution: Are you comfortable giving up a significant portion of ownership?
  3. External pressure: Can you handle the increased scrutiny and expectations from investors?

Financial Considerations​

  1. Capital needs: Does your business require substantial upfront investment that can't be funded through other means?
  2. Revenue model: Is your business model designed to prioritize growth over immediate profitability?
  3. Return potential: Can your business realistically provide the high returns VCs expect (typically 10x or more)?

Operational Factors​

  1. Team strength: Do you have a stellar team that can impress VCs and execute on ambitious plans?
  2. Proof of concept: Have you demonstrated initial traction or validated your business idea?
  3. Competitive advantage: Do you have a unique selling proposition or defensible intellectual property?

Strategic Alignment​

  1. VC value-add: Would you benefit from the networks, expertise, and resources that VCs can provide?
  2. Long-term vision: Does your long-term vision for the company align with the typical VC investment timeline?
  3. Control: Are you willing to potentially cede some control and decision-making power to investors?
Mantra

Set clear expectations, no surprises, no tears

Venture Capital​

How does Venture Capital work?

The Evolution of Venture Capital in Crypto.

VC Tokens​

The Dark Side of VC Tokens

Launch with maximum (unrealistic) value, IQ (asymmetric information) arbitrage to dump on retail investors.

Venture Capital Market​

Public Goods Grants:

Investment DAOs

  • Alliance DAO
  • Metacartel
  • Mantle DAO
  • Uniswap

Venture Firms:

Pitching to VCs​

What are investors looking for?

Everyone wants to play a part in a great story. What VCs really want from a pitch:

  1. Trust
  2. Vision
  3. Integrity
  4. Commitment
  5. Humility
  6. Hunger
  7. RoI

Pitch Deck Advice

Criteria​

Top criteria for seed/early stage investments:

  • Technical founders
  • They ship faster
  • Don't rely on hiring devs or worse outsourcing IT
  • Burn less $ to get to MVP

Questions​

What can be learned from following venture capital firms strategy and investment thesis?

  • What are they investing in?
  • Why are they investing there?
  • What do they expect in return?

Deal Flow

  1. Where is the capital flowing from and to?
  2. Which type of projects, how much?
  3. What specific characteristics?

Attachments​

What is the most important question you could ask yourself to make progress?