Omar Darwazah’s Post

In some cases, venture capitalists are not a founder's friend. Many founders and early-stage CEOs do not understand this. An unpleasant realisation comes too late. Growing companies may need to seek capital. Many founders and CEOs turn to angels and VCs in ignorance. A founding team: ✅ have invested emotion, time, passion, and some money to create and build a company from nothing. ✅ have a clear understanding of their business. They know their customer, and the customers' needs and desires. ✅ built a value proposition which satisfies those needs. They understand why they are in business and what success is. But, at the same time, many founders/early stage CEOs are unaware of ▶ how Angels/VCs work, ▶ their investment thesis, ▶ the investment business model, and ▶ the expectations of the investment community. Without the founders understanding the Investor' own business model and needs, taking on investors can lead to tragedy. In one case, a "controlling" investor blundered his way through a series of very bad decisions, he forced a pivot of a business into a dark, futile cul-de-sac, appointed a CEO who knew nothing about the business, and brought on a raft of investors on a dangerous convertible note. Defaults occurred, performance criteria was missed, debt was not able to be repaid, and the investors took effective control. They ousted the original team. From what was an award-winning, industry recognised, and highly innovative technology business the company became a carbuncle attached to a failing SAAS proposition. No one is ever likely to get their investment back. Bad decisions by the investing co-founder and his VC fund were exacerbated by the investors singular demand to extract as much money from the business as they could. In a second case, a team of highly respected, experienced and knowledgeable founders took on two rounds of venture capital from an angel syndicate and a VC. Unfortunately, the terms of the founders agreed to led the investors to have control of the business. And no time, the board had been populated by their people, the senior founding team found that they had their already modest compensation packages restructured, and the business was being pivoted away from the original goals towards a near-term liquidation. The future had been taken away from them. In an adversarial Founders verses VCs situation, Founder rarely win. A good investment strategy leads to winners all around. But for that everyone needs to know the investors rules of the game. I have founded, or turned around, and exited over 20 companies and raised over $400m for my own companies, clients, and projects. I mentor and counsel CEOs who are in early stage and growing businesses and engaging with Investors. I help them set a viable course the future. Speak to me when you are raising capital, here are my details bill@albecq.net or https://lnkd.in/evaBXJis

Winning On First Calls In the world of Venture Capital, first impressions aren't just important—they're often decisive. Many new and junior VCs underestimate the critical nature of their first call with a Founder. But seasoned Investors know that these initial interactions can make or break their chances of being allowed to invest in the best of the best startups. The First Call Conundrum First calls present a unique challenge for discriminating VCs who invest in a fraction of a percent of what they see. First calls are at the base of the pyramid and can be treated as a “volume game” by inexperienced Investors. And if you’re a generalist Investor, it’s very easy to treat them as an “introduction to a problem statement” exercise. But great first calls aren’t just about gathering information. They're about demonstrating value, establishing credibility, and positioning yourself as the ideal Advisor for a Founder's journey. And if a VC doesn’t do these things extremely well, they might end up losing the opportunity to invest before even getting a chance to dig in. The Spectrum of First Call Outcomes Like almost everything in life, the quality of a first call will fall someone on a “bad to good” spectrum. BAD OUTCOME You’re likely to be relegated to “I don’t want their money” status by a Founder if on the first call you exhibit these behaviors: - Showing up unprepared or asking basic questions about the business - Focusing solely on extracting information without offering value - Displaying ignorance about the industry or market dynamics - Rushing the meeting and appearing like a volume shop NEUTRAL OUTCOME You’re likely to push judgment by a Founder to future interactions if on the first call you exhibit these behaviors: - Coming prepared with a basic understanding of the company and industry - Balancing information gathering with sharing some insights back - Leaving the Founder with a sense of optimism and clear next steps If you'd like to read the rest of the post click on the link below. LinkedIn limits the length of posts! https://lnkd.in/eGPAquiw

🚀 Deep Dive into the Venture Fund Business Model: A Must-Read for Entrepreneurs and Investors Alike! In the realm of venture capital, understanding the intricacies of how VC firms operate and make decisions is crucial for any entrepreneur aiming to secure funding. Sergey Toporov's latest article for Startups Magazine sheds light on this complex world, focusing on why valuations play a pivotal role in the investment committee's decisions and how the mathematics of venture capital works. Read the full article for a deeper understanding and let's discuss how these insights impact our strategies and decisions in the venture capital space. Your thoughts and experiences are welcome! https://lnkd.in/gf3b7n_H #VentureCapital #InvestmentStrategy #StartupValuation #Entrepreneurship #Fundraising

"Know Where You Are Excellent and Tell Your Story Correctly!" - Omri Amirav-Drory (NFX) 🚀 The Science of #VentureCapital: Insights from Industry Experts: Venture Capital is highly competitive so grasping the intricacies of investment decisions is pivotal for #entrepreneurs seeking funding. This article draws on the expertise of seasoned investors like Omri Drory, Ph.D., to unveil the nuances of venture capital operations, decision-making processes, and effective strategies for #startups aiming to stand out. 🔍 Venture Capital Decision Dynamics: Venture capital (#VC) operates on a principle of seeking outsized returns through high-risk investments. VCs evaluate potential #investments based on their ability to deliver substantial returns, focusing on startups with the promise of becoming market dominators. Drory emphasizes the importance of startups demonstrating #scalability, #innovation, and a potential to significantly impact their target market. To secure VC interest, startups need to present a compelling case for their potential scalability, unique #valueproposition, and an exceptional founding team. These factors are crucial in convincing VCs of a startup's ability to offer not just a return on investment but to potentially return the entire fund. 🚀 Key Factors for #StartupEvaluation: Market Potential: Highlighting the scalability of your #startup is critical. VCs are on the lookout for businesses targeting large markets with rapid growth potential, ensuring the possibility of substantial returns. #Innovation and #Differentiation: Startups must showcase their "defensible magic"—unique, #innovativesolutions that set them apart and can be safeguarded against competition. Founding Team Excellence: The prowess and vision of the founding team often sway VC decisions. A team with a solid track record, deep industry knowledge, and a compelling vision is more likely to attract investment. 💡 Mastering the #VCLandscape: To catch the attention of VCs, startups must craft a narrative that underscores their growth potential, innovative edge, and team strength. This requires understanding the VC mindset, including the economic and strategic principles guiding their investments. #Entrepreneurs must navigate the #startupecosystem's "noise," positioning their ventures as irresistible opportunities for VCs. Leveraging unique insights or technologies to demonstrate market leadership potential is key. Founders equipped with a deep understanding of venture capital mechanics and an ability to compellingly convey their startup's value are better positioned to secure the crucial funding needed for growth. #VentureCapital #StartupFunding #Entrepreneurship #Innovation #BusinessStrategy https://lnkd.in/eRKxCTNN

🌟 Venture Capital: My Journey Through the Venture Deals Spring 2024 Course🌟 As a student at the crossroads of curiosity and ambition within the realm of startups and venture capital, I've recently achieved a milestone that I'm eager to share: Completing the Venture Deals Spring 2024 course: This educational journey offered by Techstars and Kauffman Fellows was not just a course; it was an eye-opener that refined my understanding of the venture capital landscape, equipping me with the knowledge and skills to navigate the VCIC (Venture Capital Investment Competition) with confidence. A huge thank you to Elliott Robinson, Miriam Rivera, Nicole Glaros, Jaclyn Freeman Hester and Jeffrey Harbach for their invaluable insights that made this course so impactful. Why Venture Deals: - Comprehensive and Free: It's a rare gem that breaks down the complex venture capital ecosystem into digestible, accessible insights, all at no cost. - Expert Foundations: The course, rooted in Brad Feld and Jason Mendelson's influential work "Venture Deals," provides an in-depth exploration of key venture deal elements, seeking to narrow the knowledge gap between entrepreneurs and investors. - Diverse Perspectives: It covers everything from the dynamics of VC transactions to effective investor engagement, negotiation strategies, and the pivotal aspect of founder wellness. Don’t miss out on this transformative experience. Keep an eye out for the next session! 👉 Sign up for updates and never miss an opportunity to grow: (https://lnkd.in/eFYz55Vu) #VentureCapital #StartupFunding #Entrepreneurship

Reposting this to reach more GPs and LPs #MaxPog Curious to know LP's insights – what's the top criteria you look for when picking a winning fund? Is it the manager's track record, investment strategy, or something more intangible? #LPWisdom 

Want to hear more about VC, PE & Family Office Trends in 2024? 👇👀

See you there ... This event is a great opportunity to learn about investment trends, Family Offices, and the challenges of AI. #familyoffices #fos #investing #aichallenges

Entrepreneur lessons from a venture capitalist- the risk of raising from VC’s that don’t trust each other. I read this article which I have added my own experiences. This movie often does not end well! These are the issues I’ve experienced: Murky, non-aligned position on the next round. When your VCs know and trust each other, they come to alignment on the next round, and what it takes to support it, and what it takes to bridge you if you need a bridge. When your VCs don’t trust each other, you never see alignment unless you are a rocketship. This just makes it harder to close the next round. You want everyone on your cap table to be your champions. It’s just harder when trust isn’t there. Murky, conflicting positions on burn rate strategy. This one can be subtly dangerous, when one large VCs pushes you to burn a lot, while others are wary of that strategy until you truly have an engine. Much harder to get a bridge round done. Bridge rounds take trust all around. If your VCs don’t trust each other, it’s hard to really get a bridge done. And if it does get done, it’s a lot harder and takes longer. Disalignment on the CEO. When VCs don’t trust each other, I often see a blame game vis-a-vis the CEO in tougher times. Bigger funds often talk more about replacing the CEO when they aren’t aligned with earlier investors. When they are aligned, and the earlier investors are supportive of the CEO, there’s rarely a discussion of replacing the CEO in tougher times. The bottom line is if your VCs don’t talk and don’t trust each other, so many strategic things around the team and fundraising are just harder than they have to be. So what can you do to improve trust? A few ideas: At least meet with later-stage VCs that your earlier-stage VCs recommend. You don’t have to take their money. But at least meet with VCs that your earlier stage VCs recommend. VCs tend to mainly recommend later-stage VCs they trust. If they also end up being your top choice, that’s a win-win. Have more, or even all, your investors come to your board meetings. It can be tempting to just have your #1 largest investor come to your board meetings. But that doesn’t really help you. Invite more of your investors, not fewer to your board meetings in the early days. It’s fine if they aren’t on the board. Just call them “investor meetings” instead. I experienced this with a VC who never engaged with myself and which resulted in a relationship that was irreparable. At the end of the day, pick the best investor you can at each stage. Your VCs don’t have to be friends for you to win. But trust me. It’s far easier if the family all gets along. And they’ll get along best when they trust each other. Start off without that trust, and you never really get it later. And your life is just … harder as a CEO than it might have to be.

Pretiosum Ventures x SeedLegals Masterclass: Preparing for Due Diligence, Advice for Founders at Seed & Series A 🔥 RSVP: https://lnkd.in/gMxA8va2 Join us for an interactive event on how to approach due diligence (DD) and data room preparation from a VC lens. The session will cover the core areas every founder should have covered when approaching VC & Fund investors for investment, as shared by the active VC: Pretiosum Ventures. Whether you’re preparing for your institutional raise or if you’re trying to pick up some top tips from experienced deal makers, this one is for you. This webinar is the first in a 3 part series focused on raising from VCs, with participation from active investors. The next webinars will cover how to structure early-stage startup fundraising (April 10th) and understand your start-up's equity compensation and team motivation (May 15th). Topics: 🔸 How to create a data room and what should be included 🔸 What VCs look for when doing due diligence on a startup 🔸 How to stand out from the crowd when approaching VCs 🔸 Top tips on speeding up DD and completing a round efficiently Panelists: Anna Andersson currently leads as the Head of Platform and Chief of Staff at Pretiosum Ventures, where she leverages her background in consulting and platform management to work with the fund portfolio, content, marketing and fundraising. Jonny Seaman is the VC Investor Partnerships Manager at SeedLegals. Through his current role working with investors and 3 years working with pre-seed to Series A+ founders, he’s seen the good, the bad and the ugly of startup investment. With over 200 closed rounds under his belt and £100m+ raised, he’s one of SeedLegals’ most experienced investment experts.