What do you look for in your product partner?
I am definitely interested in innovative teams, especially teams that have experience. We have on occasion invested in first time founders, but that is much riskier. I like to find teams that are passionate about what they’re doing and it should be clear to me that they really believe what they’re building is going to be useful.
On the flipside, I am a little bit turned off if they’re just trying to make money and I can usually see through that. As a VC, you do want someone that is motivated by making money but not only by money.
Innovation is key for me and also that they are able to by truly understanding the space and that they and their team are able to execute – which of course brings me to my next key element – the product team.
I don’t necessarily look at diversity in terms of age, gender etc, but I look at diversity from the perspective of a well-rounded team which is highly technical and able to build amazing technology. However, if they don’t have the ability to promote their project then it falls on deaf ears. So, I also look for a team with a strong technical and a business leader and maybe a strong marketing person.
A strong business CEO should also have the ability to hire good people, spend money wisely and be able to operate in Web3 which is a very different sector.
For example, if you consider Facebook, I don’t think Mark Zuckerberg was a good CEO in the early days, he was a developer. But you need to find the right people to balance the team and make sure you add experience. I think it’s great when a young dev is prepared to bring in experienced executives to help him.
Do you look for a team that looks like you?
No. There are a lot of things that I’m not good at such as building things from a technical perspective so I definitely don’t want to pick someone like that.
What other talents should the team possess in order to be successful?
Did you know timing is very important? In the past there has been some great tech but they were too late – someone else had already got there.
How much should teams ask for?
I think projects should look to raise enough money to get them to the next fundraising stage. Since this is Web3, I’m going to assume there will be a token too. Much of fundraising on Web3 is done with a token launch.
So, if you are at ideation stage and you don’t have a product, you need to raise a couple of hundred thousand. One angel might be enough to kick start your project. Then you need to go out and build an MVP that you can use to demonstrate your product and project. After that, you can go and raise a seed round, hire some board members and other key executives.
After that is the private round which can jump a lot. You really want to raise a good amount of money to give you maybe two years of runway. Another raise can be valuable here and at which point, you do a TGE or public sale.
After you have raised your money, you now need a runway of four years, with a financial budget including a 20% buffer.
You don’t want to get into a predicament where you are selling mature tokens in a bear market to try and survive because basically liquidity dries up in a bear market.
How important is the idea?
The idea is very important and should be unique. You need to look at competitors and see what they are building. Does a competitor have market share – and if yes, is your idea better? It’s not good enough to marginally improve stuff, you really need to vastly improve on any similar products.
I also love original ideas – for things that do not exist as yet.
Advice on finding the right VC
When teams are looking for their VC partners, it makes sense to find funding from the same sector. For example, if you are working in DeFi, then look for VCs who are active in this space. You might also approach VCs to add TVL to your DeFi protocol, or find a VC that can help you with introductions. If you do manage to interest a tier 1 VC, that makes it much easier to find others or even list on an exchange.
Try and find a match with the VC team – see if there is someone on the team who is very technical and able to give practical advice. It also makes sense to source VCs from across the globe so that you can build networks in every continent.
Remember at the end of the day you don’t JUST want cheques, you want to benefit from the connections, knowledge and networks that come from your VC.
