Cavalry Chronicle
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Cavalry Chronicle

Cavalry’s 100% Satisfaction Guarantee (April Fools!)

Call back our shares if you are not happy!

Not happy with us? No problem! From now on, we will grant our founding teams an option to call back our shares while keeping 50% of our initially committed capital if they are not 100% satisfied with our support and cooperation within the first 90 days. This is Cavalry’s 100% satisfaction guarantee.

Venture investing has changed enormously in recent years, especially in Europe. While 10 years ago startups had to fight for fresh capital, today it is the VCs who compete for the hot investment opportunities. While in 2012 the average seed round amounted to USD 0.6 million, in 2021 it stood at USD 2.5 million, and round size continues to trend upwards. Funds are getting larger, with growth investors increasingly entering the early stages, the market has become even more competitive, and valuations are skyrocketing. And although the market as a whole might cool down a notch in 2022, we definitely don’t expect that to happen in the early stage in particular.

Moreover, founders’ expectations of their VCs are also growing. In addition to capital, founders expect access to the VC’s network, advisory, and operational support to grow their businesses and more. We believe and also hear from our founding teams that we offer quite an attractive and valuable package with our platform. Still, we want to ensure the satisfaction of our founders. And we believe that as VCs, we need to think about what’s best for the ecosystem and for the founding teams. And that’s why we’re taking it a step further. We hereby announce our new model: the 100% Satisfaction Guarantee.

Here’s how Cavalry’s 100% Satisfaction Guarantee works

From now on, our new investments will have the option to request the return of our shares to the founding team within the first 90 days — while receiving 50% of our initially committed capital. This is Cavalry’s 100% satisfaction guarantee.

We put a lot of thought into the legal solution — especially our legal counsel Eva-Juliane Stark. In the end, we opted for a pragmatic and at the same time extraordinary approach. In addition to our tried and tested terms, every Cavalry Term Sheet now contains an extraordinary termination right for the founders in case they are not 100% satisfied with our services and support. This Cavalry 100% Satisfaction Guarantee, as well as the come-along extraordinary termination right, is granted to the founding team for 90 days after signing.

As we consider our investments and partnerships with our portfolio founders so valuable, we also decided to put the act of granting and withdrawing from the investment under the highest formal requirement available under German Law: the utmost personal legal act (höchstpersönliches Rechtsgeschäft), including that the respective declarations must be given in front of a public registrar (Standesamt) in person. With this formal attention, we finally give our relationships with our portfolio founders the attention long-deserved, equal to the second most important legal act after Venture Investing: Marriage ❤.

It’s a people’s business

We value long-term partnerships. When we invest in a company, we aim to collaborate for seven to ten years. Growing a company sustainably is a marathon, not a sprint. To ensure that we are entering a solid partnership, we conduct thorough due diligence beforehand. But at the same time, we know that a semi-optimal partnership does no one any good. So if the founding team realises at the outset that we are not delivering what they envisioned, we believe that no one should be trapped in an unhappy partnership. With this new model, we truly put the founder in the driver’s seat.

Edit: Thank you to everyone who played along with our April Fools’ prank! 🤠🙏 You will learn more about how we actually ensure founders’ happiness here.

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