Your investor has an investment thesis. Here’s why you should care

I work with a bunch of founders who have incredible stories, great pitch decks and solid businesses — and they get confused when investors turn them down anyway. A lot of the time, it doesn’t matter how good your company is. What matters is whether it matches up with your investor’s investment thesis.

An investment thesis is sometimes a detailed document, sometimes a deck and sometimes something as vague as “we know it when we see it.” What it has in common, though, is that this is a set of “rules” that the VC has. It presents this thesis to its own investors — the LPs — so they have a feel for what the venture firm will be investing in. Investing outside of this thesis is sometimes possible for deals that are too good to pass up, but it will often take some managing on the VC/LP side of things.

What makes a “wrong” investor?

For some funds, this thesis might be really broad — “all early-stage companies in California” — while others get pretty narrow: “$1 million checks into crypto startups founded by college graduates from New Jersey that have blue hair.”

If you fall outside of their “thesis,” some investors might still invest — if an extremely promising opportunity comes along, they will at least consider it — but remember that the “thesis” is what the investment partners used to raise money from their limited partners (LPs). If a fund starts deploying a bunch of cash into startups that are outside the scope of the thesis, the LPs will start getting twitchy and could lose faith.

What goes into a thesis?

Investment theses will usually include some combination of the below. Some funds care a lot about some of these things, and others are less sensitive. To some, these things may be a deal-breaker — and others take a more flexible approach.

Credit belongs to : www.techcrunch.com

You May Also Like

Insurtech goes niche

Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous […]

Insurtech goes niche by Mary Ann Azevedo originally published on TechCrunch

GTA 6 footage leaks, Revolut gets hacked, and Wipro fires 300 for “moonlighting”

Hi, friends! Welcome back to Week in Review, the newsletter where we very quickly sum up the most read TechCrunch stories from the past week. Want it in your inbox every Saturday morning? Get it here. most read GTA 6 footage leaks: Roughly 90 clips of the next Grand Theft Auto game leaked out this […]

GTA 6 footage leaks, Revolut gets hacked, and Wipro fires 300 for “moonlighting” by Greg Kumparak originally published on TechCrunch

error: Content is protected !!