Key lessons from Giant Leap’s First Fund for aspiring impact angels and VCs

To celebrate the milestone of completing the portfolio of our First Fund, we’re sharing our top lessons for aspiring impact angel and VC investors so far.

Last month, Giant Leap announced its investment into Swoop Aero, marking a key milestone: the completion of the first Giant Leap Fund which we launched in 2016.

Our mandate for that fund was to invest in 20 exceptional companies that had a positive impact built into their DNA.

We’re seeing the returns, both impact and financial, of these investments translating into strong signals of product-market fit for our second fund, from which we are currently investing. And the quality of our investable universe is ever improving, with our growing network of investors and founders sending us some of the best opportunities we’ve seen.

We attribute much of this success to a culture of continuous learning. Recognising we don’t make perfect decisions every time, we commit to record lessons as we go. In this spirit, we’re sharing our top lessons for aspiring impact angel and VC investors from Giant Leap I below.

1. Start from scratch, every time‍

With so many opportunities to review, it’s critical to build a process that allows you to start from scratch every time and remove potential biases. Having a clear mandate is the best way to start from scratch. For us, we always started with two simple questions:
1) “Does it pass our impact test?”

2) “Can we achieve a 10x return?”

Take hardware opportunities for example. We know hardware has severe challenges, but if the opportunity is substantially sized with a clear path to market then there could be enough probability of outsized returns to offset the risks. And there’s so much impact potential here! If we’d taken the common bias of many investors that “hardware is too hard”, we would have missed amazing companies like Seer Medical, Goterra and Loop+.

2. Combine consensus with conviction

We have a consensus approach to impact at Giant Leap, where every partner has the ability to veto a company if they don’t think there is enough embedded impact. This helps to ensure the integrity of our impact approach. However, consensus is rarely enough to make a deal happen.

We’ve found you also need at least one champion who is genuinely excited to navigate the ambiguity and drive the process forward. Early in our process we ask the question “Are you a ‘hell yes’ on this deal?” and require at least one (but not all) partners to say yes to proceed, which ensures we only spend time on opportunities we’re truly passionate about.

3. Play the long game

Playing the long game is about nurturing ecosystem relationships with a view to decades, not days — and it isn’t always easy.

Sometimes playing means advising a founder to do something that’s not so great for us as investors in the short-term, such as suggesting a founder bootstrap or go for grants rather than taking our capital. Often it means giving more than you take for a long time. But we’ve had experience working with investors that play the short-game — being overly competitive, extractive, or pushy — and it only increases our conviction that playing the long game is worth it.

4. Generosity from day one

In a competitive market for deals, the little things matter.

We learnt that spending time with founders that were too early for us — providing advice where relevant, responding to their asks, and making introductions — gave us a seat at the table for later rounds. That also means spending lots of time with founders we may never be directly invested in. But if you get joy from generosity, you rarely think about the expectation of return.

Chapter two: Scaling up

Looking forward, Fund II promises new adventures, new experiments, and a fresh chapter to write. As always, we plan to share what we learn along the way — including tools like our recently released impact calculator and carbon revenue multiple target — to help inspire and support the next generation of impact investors backing founders solving the world’s most pressing problems.
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If you would like to invest with us in Fund II, check out our investor page.

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Originally posted on the Giant Leap blog.