I have been a big fan and follower of Mark Suster with Upfront Ventures. His latest blog post is a video interview with Jeff Clavier. It is a fantastic interview and they have broken it down by different categories that they discuss. It is fascinating to hear that there are 150 Seed Funds in the Valley, and we are throwing in towel in Iceland after 3 funds have been raised. I wanted to bring attention to the fact that if Capital is a commodity, then what would you look for in an Investor? I don’t believe Founders in Iceland generally are asking that question. Doing the Seed funding is really difficult, that is one of the reasons why those who do it take a spray and pray approach. I believe that you need to have the scar tissues to be effective in doing Seed Funding. Jeff has that and he has been doing this for the past 10 years and has successfully shown exits, results and has been able to raise more money based on that. I am going to summarize the video with a couple of learnings.
- As a Founder ask yourself if there is a Investor/Market Fit, sometimes it is obvious and many times it is not.
- Be upfront with your investor on how they plan to do a follow on investing? Jeff explains this in the video with the term “reserve”
- Strategy matters, Jeff and Mark discuss the fabulous fall of Fab.com and one thing they never touched upon was the fact that they went after the wrong strategy, Mark talks about the correct strategy. Fred Wilson wrote about it yesterday “Focus on the Company and not the Investment“