A True Partner for Founders: From first meeting to ongoing relationship

“You’re going to come across people in your life who will say all the right words at all the right times. But in the end, it’s always their actions you should judge them by. It’s actions, not words, that matter.”

- Nicholas Sparks (Author, The Rescue)

There is a lot of talk these days about VC funds being “founder friendly”. An investor being “founder friendly” is not only an attractive proposition for startups, it is attractive for investors too. Being an attractive partner to founders, strengthens the VC fund’s brand and wins access to quality companies.

At Alliance VC, we have a strong bias for action over words. Instead of talking about being “founder friendly”, we are making sure we walk the walk instead. Let us look at the actions we have taken to ensure this.

But first, let’s start with what Alliance VC isn’t:

• We are not a “full-stack” venture capital fund investing across all assets or stages.
• We don’t have tens to hundreds of support staff to work with portfolio companies.
• We are not a “lottery ticket” investor making “bets” on companies.

While these approaches may work for other investors, they don’t work for us. We don’t believe they are the best way for investors and early-stage companies to partner.

Then what do we believe?

• We only invest in pre-seed, seed and Series A, as we believe we can be a great investor for startups at those stages.
• Our partners work with and support our portfolio companies themselves.
• Early-stage investing is a craft where quality matters more than quantity.

As early-stage investing is a craft, we have designed Alliance VC as a “partner-only” fund. Every investor at Alliance VC is a full partner in the fund, has an equal vote on what companies we invest in and have the right long-term incentives to make sure the companies succeed.

As with most things in life, incentives drive behaviors. At Alliance VC, we structure how we work and our own incentives to align with founders’.

A founder’s most valuable resource is their time. From running towards product-market fit or an ever-decreasing cash runway, time is always running out. Fundraising is one of the most draining stresses of a founder’s time, and we try to ensure our set-up is mindful of this.

So how does this look in practice and how does it help protect a founder’s most valuable resource? Let’s start at the beginning.

FIRST MEETING

“Founders should meet with the decision makers” (Anders Hallin, Partner at Alliance VC)

From your very first interaction with Alliance VC, you will be speaking with a partner. By doing so we are able to give founders the fastest and highest quality feedback.

In a more traditional VC setup with partners and associates, you often don’t speak to a partner at first. This means you have to wait for two or three meetings until you actually speak with a decision-maker. By reducing the number of meetings needed to speak to a decision-maker, we help you skip several steps. We aim to establish an immediate relationship between founder and partner and start building trust.

It also helps avoid accidental false buy signals. As nice as it is, an associate’s excitement means nothing until they and you have spoken to a partner.

THE DECISION-MAKING PROCESS

“There is respect among partners about each person’s ideas. There needs to be a majority to move forward with investments, but not full consensus. This is the balance of individual conviction and being a partnership.” (Henrik Torstensson, Partner at Alliance VC)

No hierarchy in the investment team makes the decision-making process quicker and smoother.

At partner meetings we synchronize, discuss and get input from each other. We tap into years of partner expertise and experience working in or with startups.

The final decision is a majority decision, but neither requires consensus nor can be made by one individual. But, we value the passion any partner brings to the meeting, and more than once one partner’s “table-pounding conviction” has moved us into making an investment!

THE ONGOING RELATIONSHIP

“This is and will still be a relationship business. We build trusted relationships right from the start”. (Arne Tonning, Partner at Alliance VC)

From the get-go, you have a direct and open line for ongoing communication with a partner. This continues beyond the first meeting and into after we invest. Each partner works closely with founders ensuring we provide the highest quality support.

Founders already have a good understanding of who we are, as what you see is what you get. The individuals involved in your fundraising process are the ones who you will work with on an ongoing basis. This helps build the ongoing founder-investor relationship quicker and more effectively.

It’s worth noting that this means that the day-to-day relationship is not given to junior members of the fund. Meaning every interaction draws on partner experience.

NEXT STEPS

In the spirit of not just talking the talk, we encourage you to reach out to any of us at Alliance VC. We’d love to take that first meeting with you as you look to find the right partner for building your company:

Johan Gjesdahl: johan@alliance.vc (based in Oslo)

Bente Loe: bente@alliance.vc (based in Oslo)

Arne Tonning: arne@alliance.vc (based in Oslo)

Anders Hallin: anders@alliance.vc (based in Stockholm)

Henrik Torstensson: henrik@alliance.vc (based in Stockholm)