We might be looking for you… yes, you!
Our investment criteria
Welcome to Samaipata Ventures’ blog, a VC fund specializing in market-place and disruptive e-commerce models in Southern Europe. If you don’t want to miss out on any quality information, follow us here on Medium, Twitter or suscribe to our newsletter.
We always look to share interesting content, that adds value and triggers new debate, but probably one of the things you really want to know about us is just this: what we, as a Venture Capital fund, look for in a startup. In fact we could be looking just for you.. yes, you… so listen up!
A couple of weeks ago we organized a Product Tank at the office to discuss exactly this: what VCs like ours focus on or value more in a product. This post aims to go a bit further. Here are our investment criteria, explained; hope they help!
Before we begin, it’s important to draw a difference between the criteria that result from our strong specialization from those that arise from our vision and philosophy as a fund. This means the first step is always to make sure the startup fits within our focus, in terms of business model, growth stage and geographic reach. Once we tick this box, we move on to the next level. Is there a great team behind the company? Do they share a disruptive vision of the market? Do the current KPIs foreshadow a solid business?
1- A fit with our focus:
a. Business model: We are convinced specialization brings value. That’s why we only invest in two business models we know first-hand from our previous experience: marketplaces and disruptive e-commerces.
b. Growth stage: We invest in early phases: mainly seed and ocasionally Series A. Although there’s no real consensus yet of where to draw the line between these two stages, at Samaipata we look at a number of criteria beyond typical KPIs: how strong the team is at this point, how much capital they have managed to raise, do they have a solid track record in operations, etc.
c. Geographic focus: Although we have a European outlook, we have a strong focus on Southern Europe, where we are seeing enormous opportunities for the years to come. Without loosing sight of course of what goes on in the heart of technological innovation in Europe, London, where have already made an investment (Jinn).
d. Industry: In this we are agnostic, although some industries move us more than others.
e. Round size and expected ticket: We invest tickets from 150k€ to 750K €, keeping up to 3 million euros for follow-up rounds.
Once we tick this first box, we move on to evaluate the project (if not, we’ll be in any case very happy to start learning about your business so we know each other when it’s the right time for us). Of course, depending on the stage (seed or series A) we’ll focus more on some aspects than others; in seed most of the weight will be on the team.
2- The project
a) The team: The number 1 KPI, no doubt about that. We look for outstanding, ambitious teams, that stand out in what we call the Big Five:
- Teams that share our disruptive and ambitious vision of a market
- Founder/market fit: Founders that have such a deep understanding of their product and business that literally personify it.
- Talent attraction: We know it’s a pretty difficult task at this point of the game, but we’re convinced it’s not something that can wait until later. A strong team is key from the very beginning.
- Fundraising: Venture capital funds only invest once previous capital has been raised, even if it’s from friends, family and fools.
- Operations track record.
Of course, we also strongly value leadership, persistence, internal governance, shared values and vision, etc.
b) The business and the market: We like big markets, ideally with strong tailwinds, where there is in fact a pain, and a solution that brings value and potentially disrupts the market. Of course, we also focus on the product and the technology, not just where it stands today but also what it can evolve it in the future.
c) Good unit economics: Both for the industry as a whole (scalable and defensible models) and for the startup: good margins, user retention, efficient customer acquisition costs (CAC), etc.
d) Aligned interests: Besides expected returns, we look closely at the cap table. Not only how it’s distributed and amongst whom, but also if they share our vision. A key aspect, do the founders still retain approximately 70% at the time in which we enter?
Do these points seem familiar? Send us your deck!