Getting in touch with us at Expon Capital

Screenshot from our dealflow system

Today I’m starting a series of posts attempting to explain how we work at Expon Capital, with the aim to streamline the processes and answer any questions you might have. Please comment and leave questions below if I’m not clear enough.

We are a young venture capital firm (established in the summer 2015), with a first closing for our Luxembourg-focused Digital Tech Fund a year later just before the summer 2016, and a first closing for our global Expon I another year later just before the summer 2017. So yes, we have money under management, and are deploying it (I get this question a lot… and also people wonder whether Expon Capital is my full-time job. Yes it is, 200%).

Our team has received over 3500 investment opportunities (we will call them “deals”, although they are just opportunities) since we started, with on average 57 new deals / week in Q1 2018. We expect this number to keep increasing as we expand our team and scout even more places.

These opportunities come from conferences we attend where startups pitch (29% this year; we expect to attend even more now), from early-stage databases we review (24%), from our personal networks sending us recommendations (12%), unsolicited opportunities (11%, basically from our website, and on social media), etc. However, all our investments so far have come from our proprietary deal-flow from our personal networks or companies we have reached out to ourselves. Hence, you are considerably increasing your chances to get our attention if you come to us through someone we know, who can recommend you (tip #1). It’s easy, use LinkedIn to find a link to us for example.

We use a tool to track all deals, that many other VCs use (yes, people ask me this question too :). It’s called Sevanta MyDealFlow, and we have customized it a bit. The main trick here, is that it works with email and this is a central repository where all deals reside. We simply cannot track deals that come from all channels: phone calls, instagram messages (yes they happen), LinkedIn, Facebook, conferences, on the street, on conference message boards, on networking apps at these conferences, etc. Hence, our default answer will always be, “send us an email”.

Hence, the really BEST way to get in touch with us, is to send us an email WITH an investment deck immediately (tip #2). Sending a teaser or an email asking whether we want a deck is not efficient either for you and for us, as it adds 2 emails to the flow. Our emails are readily available on our website (it should take you 10 seconds to find them). You can also apply on our website. Please do not call or email us 2 days later (someone just did) to ask whether we got the email, and if we’re ready to discuss it on the spot. We aim to get back to everyone within a few days. About 50% of our deal-flow gets discarded here. We are actively providing feedback to our personal contacts to qualify the deals according to our criteria before they send them to us.

(update on 19 June 2018. PLEASE activate the download option if you are using or to send us your deck. We get it that you love getting stats on those services — I was actually a shareholder of before we sold it to Cirrus Insight)- but it saves us the time of downloading each slide separately ! )

Actually, behind the scenes, all inbound opportunities are logged at stage 1. Our deal-flow manager logs the information in our system (it takes 15–20 minutes to document each deal… x 60 on average, that’s 15–20 hours, 2–3 days/week!), describing the business opportunity, status of the company, previous funding, etc.

Then, as a team (all Partners, our deal-flow Manager, our Entrepreneurs in Residence), every Monday, based on that information we review each opportunity in our weekly “deal-flow meeting” (1–2 minutes/deal ! x 60, 1–2 hours meeting/week), and decide whether it fits our investment thesis or not, and whether we are interested in reading the deck (ie. pursue the opportunity). In addition, a specific partner is assigned collectively to follow up on the opportunity, regardless of who you got in touch with originally. No deck sent means you are stuck in stage 1. To be clear, if you send an email Tuesday, your deck will not be reviewed until the following Monday. Our current stat this year, is that we process every opportunity in 8 days max. We aim to bring it down to 4 days (an average of a week until our next deal flow meeting). If we pass on the opportunity, you will get the NO in that time frame.

I can only suggest to read in detail our website, particularly our manifesto and the types of companies we invest in. We are going to partner with you for a long time, and our philosophy might not suit you, or your company might not fit our investment thesis. In particular, each one of our 2 funds has a different strategy. More on this in another post. (tip #3)

If you don’t get an answer quickly, it means we are reviewing the deck (stage 2). We might get in touch for more information, to say we pass, or ask for a meeting. We are currently at 20 days delay on average, which is not acceptable; actually recommended deals move up in priority, and deals from databases for example stay in the funnel until we have time to deal with them. We are actually actively hiring a principal and an analyst to help with these other deals, and we aim to bring the delay in stage 2 down to 7 days. Reviewing each opportunity takes 15–60 min depending on the quality of the deck, the website, competition, videos, apps to test, etc. (x 60 x 50%, means we spend 7,5–30 hours/week as a team to review your decks ! Luckily there are 4 of us at the moment, with more team members soon). We loose about 30% of the deal-flow here. Which means only 35% is left.

When we are ready to meet the entrepreneur (stage 3), we will have read the deck, checked the MISSING information, and will come to a meeting with a list of questions we would like answers to, before we consider moving forward. We understand this is awkward to many entrepreneurs, as they are keen to pitch us their story, think their deck requires voice over, in-person contact and what not. Actually, keep in mind we see many decks, and that we usually know your market, understand the pain you are trying to solve, etc. Take the meeting opportunity as a sign that you are on the right track, and that we want to be efficient and not waste your time. Expect 1 hour meeting at this stage (this is x 20 on average, hence 20h as a team/week). About 50% don’t make it further after the 1st meeting.

Said differently, we have a process in place to process the inbound deal-flow as fast as we can, and answer to everyone. Please do not expect us to give a thorough feedback for each company in stage 1 or 2 (tip #4). We will at later stages after stage 3 (when we have met the entrepreneur). Please do not call to ask for an update on your deal (our system actually is configured to send us automatically a reminder for each deal!), because we do review each deal in the funnel every week. We might in the future develop a ticketing system for each deal, where you can check the progress, but not before next year :)

I hope this is useful.