This article was originally published in MSM's Medium Account here.
One of the most common questions we get asked in an initial call with founders is how our investment process works. Fundraising is one of the many tasks on founders' to-do lists, however, many don’t enjoy the process. When we ask about financing round timelines, the answer is often “as soon as possible”, as founders are eager to put their heads down again and focus on building product and growing the business.
On top of this, many founders state that some VCs run opaque processes without providing visibility on timings and milestones. In a Point Nine survey, founders stated that the most stressful factor in raising from venture capital funds is not knowing where in the fundraising process they are, with many founders commenting that investors turn “radio silent” in the middle of the process. In this article, we break down what founders can expect from us.
** Note to self — don’t be Bill.*
The MSM investment process is designed around 4 core principles:
1. Collaborative but conviction led: one of MSM team members needs to love ****what you are building. If everyone in the team thinks it’s good but no one thinks it’s great, it will not get through the investment committee (IC).
2. Transparent, direct, clear, and fair: no matter who the founder is, we try to be responsive and provide honest and timely feedback. Not wasting anyone’s time is on the top of our minds. We certainly don’t get this right all the time and continue to make errors here, but this is something we all aspire to do. We have a tracking process to help crack the whip on our responsiveness.
3. Founder focused: this is the single most important variable in assessing a venture, especially in the early stage. If we had to attribute an average percentage contribution for leadership towards IC decisions, it would probably be about 50%. At this early stage, we are in the business of backing people, more so than companies.