When you think of what makes up a VC investing strategy:
Your mind probably gravitates to these 2 things:
- Investment thesis (sector/type of company)
- Preferred stage (seed, Series A, etc)
But sometimes:
It’s not that simple!
And there’s a 3rd element that gets thrown into the mix.
Some firms talk about that 3rd thing transparently.
Sometimes they show…but don’t tell.
Sometimes?
That 3rd thing IS their core strategy.
So:
Here’s what I’ve seen out there.
Hope some of these “3rd things” inspire you to get creative:
In terms of how you execute as an investor.
Get ready for some air quotes 🙂
- “Everybody’s friend” – Invest in the best companies you can find, no matter how small the allocation you’re given. And hopefully 🤞🏻 earn the privilege to invest more in later rounds.
- “Pick of the Litter” – When accelerators lean into their (subjective) winners via their associated VC fund.
- “Follow the GPs” – LPs doing direct co-investments in rounds alongside the GPs they’ve backed.
- “Index the Best” – Only invest in companies that have brand name firms on the cap table and/or as leads.
- “Spray and Pray” – Nuff said.
- “Pro-rata Party” – Take pro-ratas when the earlier investors are tapped out.
- “Round Pricers” – Have heard of at least one firm who makes their bones by pricing rounds…even though their check size is a lot smaller than you’d expect from a ‘lead’. (HT to Sunil for having shared with me that this is a thing)
- Secondaries – No air quotes needed. Some context for those that haven’t heard of it before.
- “Ad-vestors” – They’ll write a small check, and then they’ll get advisor shares on top.
- “Snipers” – Drop pre-emptive term sheets like it’s hot.
What strategies am I missing?
Hit ‘Reply’ and let me know what you’re seeing in the wild 🙂
