Operational VC

Source Ventures : Vision and investment thesis

Over the past 4 years Source Interactive (Source) has been working for starts-ups and big companies. Over this time we have grown with an empirical approach: adding services to our offering as we identified gaps on the market, gaps that we thrived to meet with the best talents. Today Source covers a large scope of services, both strategic and operational : strategic consulting, product design, UX design, development, and analytics.

Our team is completely committed to our client’s success. So committed, that often we feel we are part of the same team. When we work for start-ups we believe in their projects, and the support we extend to them far exceeds the scope of the work we do.

Yet the standard client / service provider relationship we go through today is a poor way to define these business relationships. No matter how committed we are, being “paid by day” is never a trust builder with our clients because it creates a miss-alignment of incentives between the client who cares about the increase in value of his business vs the service provider who can be viewed as trying to increase the number of days worked by his team.

It’s from this thought that Source Ventures was born. A complementary service to our offer, enabling us to show explicitly our commitment to our clients by investing financially in their business. Source Ventures will enable us to join our fate with our clients, joining together for one objective: helping them create successful businesses.

With this new service we will be able to offer start-ups the financial resources they need for their growth , and an access to an on demand exclusive experts panel in strategic consulting, product design, UX design, development, and analytics.

Moving away from the standard client / service provider relationship, to a true partnership.

We define ourselves as « Operational VCs».

Investment Thesis

Our added value reaches its maximum between the moment where the start-up has already built its first MVP and the moment its trying to achieve it’s « Product Market Fit ». It’s the reason why it seems legitimate for us to invest at the seed stage.

Deal flow

In order to shortlist new start-ups, we have designed a process that reflects our value proposition.

• At first, we position ourselves as strategic consultants to help the founders showcase the disruptive potential of their solution. Our experience in the product design field is an essential asset at this stage.
• The shortlisted project is then presented to our investment comity made up of entrepreneurs and professional investors.
• An info memo will be submitted to each comity members.
• This detailed report will embed the financial needs of the start-up determined on the basis of all the costs required by the next start-up goal.

But the financial aspect and the disruption potential is not the only key to success we are looking for. Indeed we are particularly attentive to the human qualities of the start-up team :

• The values of honesty and work.
• The quality of leadership, craftsmanship and the vision of the founders (we’re looking for at least a combination of 2 of these qualities).
• Last but not least, a fit between the founders and our team.

What we do :

• We invest in start-ups in which our operational team can significantly help increase their value.
• We offer strategic and operational services to start-ups we invest in, through a highly qualified experts panel (experts which are hard to find these days on the market).
• We help streamline digital production processes.
• Thanks to our hindsight and experience, we play the sparring partners to help the founders refine their business plan and define a sharper strategic vision.
• We ensure a longterm relationship between the start-ups we invest in and our operational team. In some cases going as far as allowing the start-up to recruit talent within our operational team.

What we don’t do :

• We don’t provide or recruit CEO profiles.
• We don’t pretend we know better the field or market the founders aim to.
• We don’t participate or organise demo days.
• ·We don’t do design nor development for equity.

A new generation of VC is rising : more operational, and made out of modern entrepreneurs. We want to change the image that founders typically have of investors by creating a brand synonym of confidence, support and serenity, where the investment is a means, and not an end in itself.