Wave-series 1: First things first

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Wave Ventures is the first student-run VC in the Nordics supporting and pre-seed investing in the most ambitious founders with the boldest visions. We are especially fond of companies emerging from university ecosystems and young founders working to solve problems important to millennials. The Wave-family consists of a management team in Finland and Sweden, a portfolio of 17 companies, and a strong Nordic advisor and alumni network. This 3-part Wave-series will open our operations from the pre-funding stage to working with our portfolio companies.

Accelerating startups from 2017

Wave Ventures was founded in 2017 with the mission of boosting the quantity and quality of startups and founders emerging from the startup ecosystem by offering valuable, low-threshold support both in terms of money and other guidance.

“Our mission now is to do our part for the ecosystem and be among the very first ones to back up especially young founders. To help them climb their first peak and figure things out, we offer them pre-seed funding, crucial basic resources, guidance in team building, and connections to co-investors and follow-on funding for the most promising early-stage startups in the Nordics”

Learning by raising: How to start a VC fund with next to no experience
Medium post by Wave Ventures
17.2.2017

This underlying vision and mission of Wave Ventures has stayed the same, but it has crystallized through the years. As we have come to better understand our capabilities, resources, and uniqueness as a VC, we have deliberately started focusing our operations and investments towards companies that can benefit most from them. This blog-post is about our investment focus in terms of company characteristics and stage.

Investment thesis

Wave invests especially in Nordics companies that fit into the following categories: millennial ventures, university research and or young/first time founders. Furthermore, we are believers of purpose and impact-driven ventures, so even though impact investing isn’t in the core of our investment thesis, innovations of today will shape the planet of tomorrow. We, as millennials value ventures striving towards a more sustainable, equal and inclusive world.

Millennial ventures

We define millennial ventures as companies working on products and solutions that are directly relevant to our generation — tackling environmental issues, challenging norms and promoting diversity and inclusiveness.

As young investors and millennials ourselves, we aim to support our peers and believe that we can understand their vision of tomorrow from a unique and relatable perspective. We believe that we can understand the wants and needs of our companies because oftentimes we are the target demographic of the products and services they are building.

Young founders and university research

All of us at Wave are university students and thus feel strongly about operating within the university ecosystems that have nurtured us. Wave aims to be an easy-to-approach VC for first time entrepreneurs who might need guidance and valuable insights into the world of venture capital and entrepreneurship. As entrepreneurship has increasingly become a more relevant and popular path for many students, being present at several university campuses offers us a perfect platform for encounters with new founders, in an unofficial and relaxed atmosphere. The proximity of the university ecosystem and students also gives us the opportunity to observe developing trends and phenomena among students, which opens a window for us to peek into the world of tomorrow. Also, we are always excited to hear about the latest university research projects looking to commercialize their ventures.

Investment stage

Wave invests in companies at their earliest stage aiming to be among the first external investors of the company. Usually, we invest in a pre-seed round in collaboration with other angel investors or other pre-seed VCs, with our investment typically being 50k€.

The reason for us investing only in the earliest phases of a company’s lifecycle is that in this stage, we can provide the company with the most valuable support (more to come in the blog-post 3 of this series). Our team is equipped in helping and supporting the founders in questions such as how to build the right team, engage first customers and experts around the company, and set the company on the right path for growth and additional funding.

We often get asked, what is too early for us? This is a question we prefer to answer with “nothing”, although there are some requirements we want the companies to meet. However, with this answer, we want to emphasize to all founders that we recommend getting in touch with us sooner than later. We are happy to support, give feedback and build a relationship despite the company being too early or lacking critical aspects for us to be able to invest at that moment.

When considering the investment-readiness of a company, there are three critical aspects that need to be fulfilled:

1. A passionate and skillful team with the most relevant capabilities to build the company

2. A concept, vision and action plan

3. Initial traction and feedback.

  1. Passionate and skillful team — The founding team has to make us passionate about them and their vision. This requires that the team includes all the most important skill sets that the company will need in the beginning. For a solo-founder, finding the right people to build the company with is often one of the first major challenges, as it tests whether they can sell the idea to other people. The founding team does not have to be big — but their skills have to match the most critical needs that the company will face in its first years. For example, if the company has a strong technological aspect to it (as most do), technological skills are a must. For a B2C company, on the other hand, UX and design are usually critical. This might sound self-evident, but it is surely not always the case. We have met with numerous software startups with outsourced software development or B2C product companies with limited experience and passion for understanding unit economics or challenges in production, logistics, and other operations.
  2. Concept, vision and action plan — Despite the company still being at the beginning of its journey, we expect to see a prepared concept, vision and action plan of the company. Founders should have a clear understanding of what the value of their product is, how they will go on to execute their plans, and why they have chosen the entrepreneurial path. This often requires putting countless hours into validating the essence of their product, researching and speaking with industry experts to understand market dynamics, and discussing and debating on what could be an ultimate long-term goal for the company. We understand that while building a startup, plans change and developed, and even after initial funding, a pivot is very likely to happen. However, this doesn’t mean that one doesn’t need any type of plan in the beginning. On the contrary, we find that a clear plan to follow is crucial for execution.
  3. Initial traction and feedback — Without a product yet on the market or the company still being in the phase of building their MVP, traction may feel hard to build, but initial positive feedback is necessary. In the very earliest stages of a company, this can be achieved through extensive market research, by building a community of advisors around the company, and/or discussing the product or business plan with industry experts. We want to see that the company is actively engaged in seeking feedback and using that feedback to further refine their plans.

We at Wave are motivated by passionate people working on inspiring projects and are always more than happy to discuss anything related to entrepreneurship, current trends, or venture capital in general. If you feel your company would be the perfect addition to the Wave-family don’t hesitate to hit us up at team@wave.ventures, and let’s grab a cup of coffee!

Next up: Wave-series 2

This article was co-authored by Katja and Julia from Wave Ventures

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Pre-seed investing in the boldest teams in the Nordics

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