Confluence.VC

This week we had on Kenny Rose with FranShares.

FranShares makes it possible for anybody to build passive income through franchise investing. Their team is planning to open up access soon, and you can sign up for the waitlist for free using this link.

In this talk, we cover:

• The appeal of cash flow compared to speculative bets
• Creating hype before a product launch
• Unromantic parts of startup life

This week we had on Kai Cash (@kuaicash) at Primary Venture Partners.

Primary is one of the best seed funds in the world. They focus on backing the best founders in New York, and this approach has resulted in their companies raising follow-on capital nearly 90% of the time. Kai is on the investment team, and he spends his time focusing on climate and software below the application layer.

In this talk, we discuss:

• Breaking into VC
• Creating leverage as a junior investor
• Building trust and deal flow with the other side of the table

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Guest: Jake Kupperman (@jbkupperman)

Company: Level Ventures

Location: New York, NY

Background: Level is a leading data-driven investment manager focused on technology innovation. Their team thinks about venture investing differently than most, and they apply deep levels of data science to inform their decision-making process.

Talking points (five-second version):

• The human aspect of venture capital becoming more data driven
• LP value creation to venture funds
• Non-obvious differences between working in venture and working at a fund of funds

This week we had on Abha Nath (@abhanath) of Wonder Ventures.

Wonder is an early-stage fund that aims to invest earlier than anyone else in Southern California’s best founders. Since its founding in 2015, the firm has invested in category-defining companies like Honey, Luxe, Joymode, and a number of others. Abha is the first and only hire at Wonder, and we wanted to have her on to dive into her unique path.

In this talk, we discuss:

• Abha’s journey to venture and how her previous roles at the Disney Accelerator and Ring prepared her to be an investor
  
• What makes Southern California unique as a startup ecosystem
  
• What has changed when evaluating early-stage companies virtually
  
• Some red flags that make businesses un-investible
  
• We flip it around and let Abha ask us a few questions at the end

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Guest: Anubhav Srivastava (@anubhav0313)

Company: Tactyc

Background: Anubhav is the founder and CEO of Tactyc, a venture portfolio construction, performance forecasting, and scenario planning software for data-driven funds. Get started with a 30% discount on their Construction and Solo plans by using the code CONFLUENCE30 at checkout.

Talking points (five-second version):

• Why fund managers should never be creating spreadsheets
• The importance of portfolio construction and scenario planning
• What's going on behind the scenes in the venture services market

Key takeaways (30-second version):

• Funds that are shutting down right now are going to miss out on some of the best opportunities. Valuations are down, founders still need capital, and investors that wait on the sidelines are going to miss the upside. Scared money don't make money.
• Especially at the pre-seed, revenue shouldn't be prioritized highly. Product-market fit and having early indicators of traction matter more than immediate revenue.
• More and more opportunities are popping to syndicate and tag along into deals they're already doing.
• Portfolio construction is a process. You usually have to lay this out in the fundraise.
• A good portfolio construction strategy is an evergreen asset you can keep using to manage investment decisions going forward. The better you lay this out, the better you can stick to your strategy over the lifecycle of the fund.
• Your primary goal as a GP is not to create spreadsheets. It's to get into deals and raise capital from LPs.
• Most up-and-coming venture services providers are collaborative and are building out products with a focus on integrations. Most of the traditional venture services providers are exclusive and want to build a one-stop shop for VCs. It's easier to see this on the inside, but it holds true.
• Australia is one of the fastest-growing venture capital markets in the world. According to Anubhav, they have clients over there, and they have some of the best internal processes he has seen.
• Startups need most help around distribution. If you want to actually be helpful to your portfolio companies, help them get the word out.