Pitching to Inventure
Pitching to a VC fund can be a thrilling experience for first-time founders. Sometimes it is a lean and straightforward process, but more often it takes time and a few iterations before landing the right investor on-board.
Overall, the good old idea of a referral is the quickest way into the meeting room, but it is not the only one. We often look at industries and verticals from a holistic point of view. Usually, we approach companies we believe are doing something interesting in a space we feel excited about.
For entrepreneurs, however, it can sometimes be confusing to understand at which stage of the process they are at, what the next steps are and in what timeline. That is why we thought that it could be handy to have a sneak peak of how our pipeline of opportunities is structured.
Inventure's pipeline has 6 different stages. Namely:
1. Watch List
The first step of our pipeline is more of a "resting spot" than a dynamic CRM step. Companies in the "Watch List" are companies we are interested to follow up on, but are not yet ready for a round. These companies are on our radar but for a reason or another they are not currently fundable by us. They might be too early for us, or are raising their rounds in the later future.
We would typically follow up on these companies every few months checking how the team is progressing and if there is something we can do to help. Our goal is to help the company growth with the right introductions. We would usually try to ping the company to angel investors we believe can bring value to the board or introduce key recruits that can push the company closer to our reach.
This stage is very much about market study. Each of us in the team has a specific focus on different verticals. The exciting part here is the variety of solution that one discovers in the market. Companies at this stage are often companies we want to actively reach out to and get to know better.
3. New Case
This is when things get moving. We would typically continue from the first meeting/call with some follow up meeting or call. At this stage we are very much trying to understand more about the market and the team, and discuss how we feel about the company's solution. Some companies we meet at this stage might not yet be ready for a funding round (or might be too early for a round with us). There is often quite a lot of back and forth between "New Case" and "Watch list" stage.
4. Let's meet
From this stage onwards, at least two people from our team will be involved (please note: it might happen that more than one person is involved before this stage). By now, we have an idea of our investment thesis and our goal at this point is to meet more people from the team and understand the team dynamics better. We want to see how we would fit in the picture and how we could help the company execute the plan.
5. Preliminary Analysis
Once at least two team members are on board and we have clear investment thesis, we discuss the case more openly with the team. As a company, you would most likely get to know more Inventure team members during this phase. This is the time to ask questions and also to get to know us. Figure out who we are and what our individual strengths are. If the team decides to offer a term sheet, the company moves to the next step and more detailed negotiations begin.
6. Term Sheet & DD
Companies at this point in the pipeline have received a term sheet from Inventure and are in the process of negotiating it, or are in due diligence to finalise the investment process. Be sure you understand the VC terms and their consequences on the shareholder structure (you can find a glossary here).
One additional component to the pipeline that is usually very relevant for entrepreneurs in the fundraising process is the timeline. How quickly can one move from one step to another? And, ultimately, how far is the company from a term sheet negotiation?
The timeline very much depends on the case, the timeline of the fund, the timeline of the round and the competition level (yep, VCs have massive FOMO!). The tip we usually give to entrepreneurs approaching a round is to start building the relationships as early as possible. A big part of our investment process is getting to know the team we might end up backing (and for the companies it should be getting to know our team). The more familiar we are we the team, the easier it is to make the decision.
In conclusion, however, each case is different, but we recommend you to ask where you are at in the fundraising process and to have aligned expectations regarding the process and the schedule with the opposite side of the table.
Overall, when in doubts - feel free to ask. It is fair (and fairly logical) to expect clarity during the fundraising process, and it can improve your experience and “sanity” during the round.