RTC #18: Who to approach at a VC firm

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Headlines 📢

• Talking with a VC Associate will almost never convert into actual funding (… this started quite some discussions last week) 💥

• Rare footage of the VC decision-making process 😂

• VC money makes you dumb

• OpenAI's Altman pitches ChatGPT Enterprise to large firms, including some Microsoft customers

• Founder personality could predict start-up success ✨

• Sky-high AI engineer salaries are complicating startups’ equity playbook 🤑

• Generative AI is coming for healthcare, and not everyone’s thrilled

• New VC funds investing in Europe 💸

  • Floating Point closes $70 million in capital for their Second Venture Fund to invest in healthcare, climate and defense

  • Lakestar announces closing Lakestar Early IV and Lakestar Growth II funds for $600 million, investing in technology advancing Europe’s digital sovereignty, bringing Lakestar’s assets under management to €2bn

  • Quantonation announces the first closing for €70 million of its second early-stage fund dedicated to Quantum Technologies, Quantonation II

‘Road-To-Capital’ Q2 2024 Survey

🤿 Who works at a VC firm and who to approach

So this week is about:

👉 Having a closer look at the different roles in a venture capital fund

👉 Getting a better understanding of their tasks and focus

👉 Assessing the ✅ and ❌ when approaching each group with your pitch deck

This is an overview of the different roles from a previous issue showcasing how much one can make working for a venture capital firm

Can we use this table as a basis for the roles? The answer is: IT DEPENDS.

Each firm is unique, and more and more firms are coming up with their own titles or even no titles.

So I decided on the following main (classical) roles I have come across with most VCs:

• Analyst/Associate

• Investment Managers/Principal

• Partner

Side note before we start: I did not come up with the nicknames 🤡

Analyst/Associate

Main focus: Analysts/Associates perform several functions within the venture capital firm

Title/Nickname: “Number Cruncher” and “Research or Portfolio Monkey”

Main responsibilities:

• Evaluating pitch decks and conducting due diligence

• Helping manage relationships with the firm’s portfolio companies

• Doing the majority of the detailed work at venture capital

  • Research

  • Modeling and analysis

  • Anything else needed by the Partners and Principals

Investment Manager/Principal

Main focus: Principals play a critical role in evaluating potential investments

Title/Nickname: “Partner in Training”

Main responsibilities:

• Sourcing and evaluating new deals

• Conducting due diligence

• Managing relationships with portfolio companies

• Monitoring market trends and technologies

Partner

Main focus: Responsible for making significant investment decisions and developing relationships with entrepreneurs and investors

Title/Nickname: “Decision Maker”

Main responsibilities:

• Making key investment decisions

• Building relationships with entrepreneurs and investors

• Participating in fundraising

• Assisting portfolio companies

Some additional thoughts on the “Pitch Approach Assessment”

Here, again: it depends. This is your job to find out as part of a tailored investor approach.

• In some firms, the Partners and Principals don’t keep their ear to the ground quite as much and genuinely rely on associates to keep them informed about trends and potential deals

👉 Who to approach: Associate

• But other firms have active Partners and Principals who maintain their own channels to get inbound from friends or other sources of warm referrals. These deals tend to be more interesting to them

👉 Who to approach: Principal/Partner via intro

What does this mean for you as a founder trying to raise capital?

• Any relationship is better than none

• Do not underestimate the importance of existing relations and continuous communication

• Start the relationship early on and from a position of “strength”

• Key success factor: right network and access to it

Additional reads on how VCs operate?

👉 How VCs make money

👉 Investment funds need capital (too)

Final Note: Thank you VC Lab, Houck, Eva Dobrzanska, sifted, Mergers & Acquisitions for your inspiration and input for this issue 🙏

📖 Infographic of the week

Raising VC money in 2024:

📅 Calendar of main VC events in the upcoming weeks

“Networking is a lot like nutrition and fitness: we know what to do, the hard part is making it a top priority”

April
• 0100 Conference Europe 2024 | Amsterdam, The Netherlands | Apr 16-18
• TechChill | Riga, Latvia | Apr 17-19
• eMerge Americas | Miami, US | Apr 18-19
• Startup Grind Global Conference 2024 | San Francisco, US | Apr 23-24
• VC Platform- Global Summit ‘24 | New York, UK | Apr 24-26
• TechCrunch Early Stage 2024 | Boston, US | Apr 25

May
• Data-Driven VC Summit 2024 | Online | May 5-8
• Private Debt Investor Europe Summit | London, UK | May 7-8
• Emerging Founders | Warsaw, Poland | May 7
• EU-Startups Summit | La Valletta, Malta | May 9-10
• Impact’24 | Poznan, Poland | May 15-16
• Mashup | Malmo, Sweden | May 15-16
• Tech.eu Summit | London, UK | May 16-17
• Finovate Spring | San Francisco, US | May 21-23
• Infoshare | Gdańsk, Poland | May 22-23
• Viva Technology | Paris, France | May 22-25

👉 Get the full list of events in 2024 here

This was it for today.

Did you like it?

If the answer is YES then you only have one task now:

👉 Share Road-To-Capital with 1 friend so that he/she joins our community 👈

The “Top 25 Most Active German VCs” are waiting for you!

See you next Tuesday,
Stephan 👋

Issue #18 | 16 April 2024