Introducing BoCG Ventures Peninsula Fund I
Origin, Team, Core Values and Investment Thesis
Origin
BoCG Ventures initially started in 2014 as BoCG, a boutique advisory firm specializing in distressed assets and startup development. Over time, the Firm evolved its focus and expanded into portfolio development and venture operations. In 2019, the firm developed its thesis on antifragility and established its proprietary framework called the Venture Operating Model (VOM). Throughout the years, the firm scaled its distressed asset portfolio while continuously refining the VOM framework to drive value creation through technology adoption. In 2023, recognizing significant shifts in the global macroeconomic landscape, the firm doubled down on its thesis and diversified its strategic operations to the Middle East. As a result, the firm is establishing its first BoCGV Fund in the region to fully capitalize on the upside generated by the VOM.
Core Team
BoCG Ventures led by two General Partners (GPs) who define themselves, and actively seek to surround themselves with, “T-shaped” individuals: which possess both deep knowledge and expertise in a specific domain as well as curiosity and eagerness to learn which transcend boundaries.
Lyon L CA (left side) is responsible for strategy, operations, and finance at BoCG Ventures. With a strong focus on fundamentals and strategic value creation.
Chris Chris MGH 夏 (middle) leads the technology, product engineering, and structure via systems design at BoCG Ventures. Her role centers around being thesis-driven and prioritizing a builder-first approach.
Values: Prioritizing execution over intellectual constructs. The belief that mutual trust can only be established through hard work and co-building. Recognizing that talent alone is not sufficient without diligence and discipline.
VOM — Venture Operating Model
BoCG Ventures prioritizes identifying opportunities to nurture and expand antifragile companies. We actively seek founders and management teams who are dedicated to investing the necessary effort for driving long-term growth. To achieve this goal, we’ve developed and refined our proprietary three-phased approach called the Venture Operating Model (VOM), forming the foundation of our strategic methodology. We emphasize a minimum of three months of co-building engagement with potential target companies before making an investment. Afterward, we maintain an active role for at least the first six months of execution, providing continuous support in implementing the co-built company fundamentals and offering strategic guidance aligned with scalability.
Antifragility Investment Thesis
Our investment thesis revolves around antifragility, inspired by Nassim Taleb’s concept in his book: “Antifragile: Things That Gain from Disorder.”
Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressor and love adventure, risk and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resist shocks and stays the same: the antifragile gets better.
BoCG Ventures goes beyond conceptualization by actively building antifragile ventures, not just seeking them out. This is achieved through the construction of robust operational frameworks and technology architectures, harnessing the potential of emerging technologies like blockchain, to withstand stressors. These ventures are equipped with an operational and technical DNA that enables them to deploy changes, adapt, and thrive in the face of internal and external challenges.
VOM as the funnel for our Fund
The evaluation of investments centers on the distinctive Venture Operating Model (VOM). This model entails actively participating in the creation of strategic, technological, and implementation roadmaps for potential investments. By utilizing the VOM framework, a natural pipeline of potential portfolio companies (PortCos) is formed for BoCG Ventures’ Funds.
Middle East has the potential to rise as a leading regional innovation hub
The Middle East boasts all the necessary ingredients to become a thriving regional innovation hub.
By examining key contributing factors, it is evident that the region is poised to outshine its competitors over the next two decades. In this comparative analysis, we assess Silicon Valley, Israel, Asia, and the Middle East, considering three distinct time intervals (1980–2000, 2000–2020, and 2020–2040) across various vital dimensions:
- Entrepreneurial Culture and Risk taking
- Access to Capital
- Talent Development and Education
- Supportive regulatory Environment and Policies
- Collaboration and knowledge sharing
Middle East is the right environment to spur innovation:
- Convergence of emerging technology: Blockchain, Augmented / Virtual Reality, Artificial Intelligence, Optic Fiber / 5G, Internet of Things, etc.
- Forward looking regulators which actively listen to innovators and welcome ongoing conversations with new emerging companies.
- Visionary country leadership which created environments where raw tech talent is welcomed to experiment with a higher standard of living while testing radical technology innovation.
- Abundance of capital which has recently (in the last 24 months) re-focused to deploy locally compared to an historical diversification abroad, away from Oil and Gas.
The traditional venture capital (VC) model requires augmentation, and our Venture Operating Model (VOM) provides a solution to address its shortcomings
Hope-as-a-strategy does not work anymore
The venture capital (VC) sector frequently showcases instances of accomplished ex-founders who have achieved one or more successful exits and subsequently transitioned into roles as venture capitalists. The narrative suggests that their history of building thriving companies from the ground up enhances their ability to identify and foster the upcoming wave of founders. Although this storyline is captivating, the truth is that only a small fraction of these individuals prosper in their new venture capitalist roles; in fact, less than 5% of VC funds yield over 95% of the total return for LPs.
Most VCs still rely on a common underlying strategy, which can be summed up as “hope-as-a-strategy.”
For serial entrepreneurs who consistently achieve success, their 24/7 focus on a unique product or company is often a key factor. However, when they transition into venture capitalists, they lose this level of focus and all-in mindset on a single product-market-fit success. In fact, they manage to de-risk their returns through management fees while retaining the upside potential through carry interests. This approach was necessary and beneficial decades ago when VC funding represented the primary route for start-ups, when venture capitalists played a crucial role in driving radical tech innovation. However, the financing landscape has evolved, and founders now have numerous alternative funding options. Furthermore, blockchain and tokenization have the potential to render the traditional VC model obsolete in the next decade.
Mutual trust between investors and founders cannot be built solely through financial transactions
Mutual trust is a valuable element in any relationship, but it requires time and a consistent commitment from both parties to nurture and maintain. However, there are environments where mutual trust is non-negotiable, such as the military. From ancient times with the Spartans to modern special forces like the Marines or Navy SEALs, the process of establishing mutual trust and bonds remains consistent: enduring hardships together, undergoing rigorous training, and embarking on a growth journey that demands exceptional drive, determination, and commitment.
At BoCG Ventures, mutual trust is cultivated by embarking on a transformational growth journey alongside founders and management teams. Trust isn’t a commodity attainable through financial means and external due diligence; rather, it’s achieved through dedicated collaboration with the core venture team, thereby enhancing antifragility. This approach is the sole path to nurturing authentic and enduring trust in partnerships.
There is no better substitute for in-depth due diligence than actively building company fundamentals together across finance, operations, and technology
There’s a significant difference between reviewing what’s been done and actually taking part in the building process. It’s about actively molding the foundation with the core team, engaging in give-and-take challenges, and striving for a synthesis that everyone can feel good about. And here’s the kicker — being hands-on like this gives us a real leg up compared to other investors. In this whole journey, we don’t rely on outside research for our investment memos; they’re a complete look at how the team has hustled the venture to a point where it’s ready for fundraising, all rooted in those solid antifragile basics and fundamental.
VOM, the best kept secret in Private Equity and Venture Capital
The Venture Operating Model (VOM) is not a disruptive innovation. Successful private equity (PE) funds, consistently generating alpha for investors, have been employing their own VOM-like models internally, outsourcing execution to external, small elite teams. However, they usually put it into action after making the investment, using their playbook to reconstruct the company. However, there are benefits to applying the VOM model prior to investing in a company and thereby establishing mutual trust between potential future investors and the core team in each venture where the VOM is applied, such as in Venture Capital deals.
Conclusion
At BoCG Ventures, we firmly hold the belief that antifragile companies can only be constructed upon antifragile technology and operational frameworks. Our approach involves active collaboration and investment in the future of these companies, seeking to establish a market leadership position. The Venture Operating Model (VOM) framework allows us to co-build and co-operate with exceptionally skilled individuals and teams. With the Arabian Peninsula providing an ideal fit for BoCG Ventures, our focus remains on this region. Our mission centers on identifying and partnering with remarkable teams of founders and operators who share our vision and are dedicated to constructing antifragile businesses. Together, we have the potential to shape the future and embrace the opportunities that lie ahead.
