"Do not go where the path may lead. Instead, go where there is no path and leave a trail."
- Ralph Waldo Emerson
We invest in startups where digital technology is a key component to the business model. The business model must be sustainable.
Early Stage Revenue
We look for companies that don’t have fully commercialized products. Revenue from beta stage products and pilot customers is perfect. No revenue (yet) is good too provided that we are confident in how the product-market fit is validated.
Less Than 5 Years Old
We don’t invest in businesses older than 5 years. We have no flexibility on this, sorry.
Team of team players
Like most investors we put great effort into understanding the capability and potential of the team and its key individuals. A great team is far more important to us than a clever plan. Ultimately, it’s all about the execution of the plan and the ability to quickly adjust it when needed. We accept that a team isn’t fully complete at the early stage, but we need to see a strong foundation of team players with the strength and brains to navigate stormy waters.
Sizeable and growing market
We are looking for startups that are addressing a big and growing market, and preferably a market with global scaling opportunities.
Consumer behavior, trends and markets are changing rapidly. New companies disrupt established markets every day. Companies without a long lasting competitive advantage often lose momentum. We are looking for companies that have an advantage that can increase their chance of taking material market share and stay on a growth trajectory. Game changing IP, unique business models, key partnerships, patents etc. will make us listen carefully.
It’s impossible to predict how and when an exit will happen, but we want to know that we are aligned with the founding team on a path and horizon for an exit. Our exit horizon is normally 5-8 years.
Scalable business model
We don’t invest in a startup that won’t be able to scale its operations efficiently. How fast a business can scale and how much money it will require is essential to us. We’re spending quite a lot of time on modeling this out before we decide to make an investment.
Co-investors and capital need
Another important part of our risk assessment is to understand how much money it will take to build a valuable and attractive company, and how we can help securing enough capital. As a professional investor we normally take an active role in building a pipeline of investors for future financing.
As professionals, we spend a lot of time on the companies we invest in. In order to secure a good working relationship with management and other shareholders, it’s key that we get things right out of the starting gate. It’s important to us that we get our interests aligned with the founders. Our solution to this is to secure 15-20% ownership when we make our first investment in a company and maintain our share in future rounds. This way we are aligned with the founders with regards to raising more money at a high valuation. It’s not good for a company if existing investors are looking to increase their stake at a low valuation.
Our ability to add value
We only invest in businesses where we think we can add substantial value. We have a very experienced team, but there are still market verticals or industries we don’t know well enough.
Validation and trust
Getting backed by a professional and reputable VC like ProVenture brings validation and trust that usually makes it easier to raise more money down the road. It usually also increases a startup’s chances of getting commercial agreements and partners.
Backing, support and empathy
Most of the ProVenture team members have been founders too. We understand the human aspects of being a founder, and we have learned from many mistakes. We also know how much damage investors and board members can do to a company if they do things the wrong way.
A predictable source of capital
We’re planning for the long run and typically invest in future financing rounds, provided that the company is progressing at healthy levels.
Experts on venture financing
We have broad experience in dealing with VC’s and industrial investors in series A/B rounds. We know the process and pitfalls, and often take a lead role in preparations and negotiations.
Experienced business developers
Our team members have worked with more than 50 portfolio companies. We have broad experience in business development.
Broad and relevant business network
For decades we have built valuable relationships that often make a difference to our portfolio companies. Knowing where to go usually make things a lot easier.
Our goal is to move as fast as possible, but we are loyal to our process that is designed to fully benefit from the diverse and complimentary skills in our team.
We always work in pairs during assessment and analysis, and the entire team is always involved in investment decisions. How much time we need depend on the nature of the business, market segment, IP, our internal prioritization and capacity, and eventually how fast we agree on deal terms.
A rule of thumb is to start the fund raising process at least six months before you need the money. We strongly recommend that you do your homework before you start the formal process. You should put in the extra hours to map what investors want to understand, and more importantly, figure out a good way of explaining it. Don't take it for granted that we intuitively understand the brilliance that seem so clear to you. We want to understand and we are certainly looking for brilliance.
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