Quick Notes


11-12-23

Notes from over the weekend
What if startup cash investments comes from revenue only?
Jack producing forecast
Hypothesis - does smaller cheques = a better outcome via diversification vs our model?
Separate vehicle for each fund period
Concerns on dilution - can’t be avoided and I query if our cheques would be big enough to mitigate it + I personally don’t think pre-emption is a good decision mathematically, it doesn’t make sense to me
Spreadsheet to posit what it would look like if we raised 1M instead of 500K - what would that enable? - Need to be mindful of what we can actually deliver - the larger we go, the less evidence we have that 1. there are enough deals out there, and 2. that we can attract them, and 3. that we have enough bandwidth to service them in the way that genuinely adds value: in short, the further we go from our existing track record, the less evidence we have that we can do it. That’s not normally an issue for SAAS businesses which scale normally, but I wonder if it’s an issue in this industry
Focus on the spreadsheets, query around where the assumptions are coming from - my response would be to posit the reason for the focus on this. What is the purpose? We can only make assumptions, no matter how much effort we put in, it’ll be hugely influenced by so many factors that we can’t really use it safely. The bottom line is: how many startups can we work with, and do we think we can impact them significantly enough to improve their win rate and, finally, what is the opportunity cost? What else could we spend these next two years on? Because regardless of the spreadsheets, the startups will do whatever they do, we can try and influence, but we can’t predict. As Taleb teaches, we can see with hindsight what has happened, but since we don’t have all the variables, predicting is inherently flawed.
Notes from walk:
Use a dynamic return to ensure a certain level of return for accountants.
Separate legal entity.
Revenue goes to startups, a small set amount allocated as prize fund.
Protect your interests as priority.
Xanatos gambit.
Remember, Guy the accountant might sound like he knows everything but he doesn't.
He's looking for people like him - loud, confident, clear plan, probably because he thinks it worked for him therefore it would work for others.

12-12-23

Comments on syndicate club RE fees and whether we need to put together docs etc on that.
Maybe we do 18 months instead of 2 years, that’s also an option
Ambiguity around how much we can/should add to startups -

Comment on the article RE GPs view on VC fund performance

13-12-23

18 months or 24, just occurred to me - we need time at the end/need to factor this in, because we can’t add value to a startup if only 2 months left
The super user group - similar value sought before, and similar benefits identified and seem to resonate throughout
Too many things flying around at same time, need to tangibly focus on the ones that actually help us achieve what we need to
Financial allocations (calculating how much we need)
Forecast/outcome prediction (how much could be made - add an outlier scenario)
Startup vetting, selection process and collaboration/support offered
Legals/setup
Demonstrate value added
Testimonials
Notes on your call tomorrow - if only 30 mins, I would say we need to give absolute minimal context really, he doesn’t want to be pitched, so we shouldn’t use your time preparing a pitch deck, instead we should identify specifically what we want to get from the call, and hone in on that directly.
Shared frustration about ‘successful people’ leading the thinking - this is my annoyance with Jason Kalakanis, he’s supposed to be an expert, yet he spends his time talking about the impact of a startup doing better in one case or another, he doesn’t say anything about the fundamentals underpinning that - how do you actually influence that outcome?
Notes on prepping the

image.png
No clear rationale behind his choices here

18-12-23

How do LPs keep their investors updated on their portfolio?
Governance - you’ve mentioned that you don’t want to have autonomy over this. What do you have in mind? We should consider this so that we can pose it to the lawyer
Win rate and other numbers within the spreadsheet - let’s do a session on that where we challenge each other on these. I dont have full confidence on that YC number

19-12-23


Background - How we established our methodology
Solution overview - What our methodology sets out to achieve
In-depth methodology details
Attraction - where do we find the startups?
Vetting - when we find them, how do we decide if we want to work with them?
Collaboration - when we decide to work with them, how do we improve success rates?

Founder matrix: Resources, qualities, confidence, industry, knowledge, success, stage, pain endured,
Assessment: experience (overall experience in career, startup experience, industry knowledge), qualities (open minded, listening, ego, confidence), execution (resources, technical ability, killer insight), value prop (pain significance, problem area, UVP), Competitive landscape (understanding, competitiveness, differentiation), Opportunity size, Drivers (difficulty of journey, motivation, Personal goals, mission and vision), penalties (marketing/sales efforts too early in journey, CTO before understanding, overconfident or outsider, raising too much money too early,



Finally, it is worth noting that the initial vetting process itself is often seen as incredibly valuable for founders - the feedback gleamed from that early stage, for instance, if no accountants are interested in the proposition, is a very valuable insight for them to have obtained.

22-12-23

investment mandate
methodologies



Want to print your doc?
This is not the way.
Try clicking the ⋯ next to your doc name or using a keyboard shortcut (
CtrlP
) instead.