How do I know what investor invests in which stage?

David Wu / November, 2017

Description

David Wu, General Partner at Maveron explains in detail how you can figure out which investors invest in what stages.

Video Transcript

How do I know what investor invests in which stage?

Historically, the venture business has been a very opaque business and if you talk to most first-time entrepreneurs it’s very hard for them to figure out what different investors do, what’s their mindset, what are the idiosyncrasies at different funds. The good news is, this is changing a lot. I think in the last 5 years the business has been forced to be much more transparent than it’s ever been and I think the culture of the modern world between social media, between people talking, between blogging, the entrepreneur more so than ever are talking about their experiences in the past. I think that’s generally a really good thing for the entrepreneurs.

The starting point is, you know, online there’s a lot of information starting with CrunchBase and looking at the funds. One thing, I look closely at is the size of the fund. Often times a billion dollar fund isn’t doing very many seed investment and if they are it’s more of a win. At the same time at 10 million dollar fund isn’t doing late growth stage investments. And if you look online, you can also look at the companies they’ve invested in. When you look at these companies, often times they delineate basically in the press release as well as in CrunchBase and all of these other online databases, when did they put their first money in. I would disregard the rest, but look at the first time they put their check in, and what round that is and by that, you can kind of infer do they mostly do series A round, do they do mostly growth round, or they do mostly seed.

I think those are still kind of the three buckets. Do they like to take a lot of risks early on, do they like to invest in that A round, or do they like to power on when it becomes obvious? And on top of that, it’s pretty easy to talk to an entrepreneur that has been through this, maybe it’s his second time around, or he’s plugged in, and they should be able to categorize your list of VCs that you’re talking to and what stage they do.

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