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Good to know about VCs

Even if the founders did a fundraising with us, it's useful to recall the basic of our job to be sure we talk the same langage.

VC organisation and titles

VC organization and titles

VC TitlesJob descriptionRole in your fundraising process
The boss. She/he is in the investment committee. May lead investment from time to time
The senior investor. May be in the investment committee
Champions to convince
The investor. She/he is in autonomy on the investment side. Source deals directly
Champions to convince
The padawan. She/he co-lead or support investment with a partner or a principal. Source deals directly
Best entry point
The worker. She/he is doing investment memo. May source directly
The guru. She/he may be in the investment committee. Do not invest but may source
none
The operator. She/he may be in the investment committee. Do not invest nor source
none

Decrypting VC organization

VCs raise funds too ! VCs have also investors and are in the same process of regular fundraising as a startup.

VC is a two headed business: the Fund on the one side and the management company (GP) on the other side

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Questions to ask to VCs you meet

Before a meeting :

What is the strategy of the fund in term of geography, sectors, maturity stage ?

Don't loose your time with a fund which clearly doesn't invest in your geography, sector or maturity.

During a meeting:

What is the size of the active fund ?

Good to know : a fund can’t invest more than 10% of a fund in a single company. If the VC has 100 millions left and you ask for 10 millions, it will not workout.

When the active fund was raised ?

A fund has an investment period from 3 to 5 years. If it's the begining of the investment period : the fund tends to invest in less mature deals than its focus If it's the end of the investment period : the fund tends to invest in more mature deals than its focus

What is the investment process ?

It's important to understand if the process is subcontracted to external (experts ...) or kept internaly, the number of interactions needed and the lengh of the process

Who is in the investment committee ?

You have to know who you'll have to convince.