I have it often Annoyed by warm introductions. I understand why investors insist on it, but it has always struck me as lazy and inexhaustible.
So I was elated and curious when I was introduced to GoAhead Ventures. The company claims it will listen to anyone’s speech, no matter where you are in the world or what you’re building as long as you’re a seed company or seed company.
catch? They insist on showing a video. The upside? They promise to get back to you within a day to let you know if you’ve made it to a partner meeting. Assuming their (very light) due diligence goes as planned and they like your company, you can have the money in your bank account within a week.
The approach is different enough from most venture outlets that I decided to speak with Clancy Starr and Phil Brady, both managing partners at the firm, to find out what life is like with the gay VC doors wide open. I was also keen to get the inside track of what the company looks for in investments and what the founders can do to stand out.
“When we started, what we were doing was very similar to other VC firms: We were trying to do some thought leadership, do some grassroots marketing around the Stanford campus; that kind of thing. Describing the company’s journey from 2014,” Starr says, He invented and led it.”
COVID changed investing in a lot of companies. Gone are the days of in-person meetings and everyone had to deal with the days of Zoom chaos. That’s when GoAhead decided to try and rethink its operations.
“We wanted to figure out how to scale[our process]more effectively. Now, we have founders who do a video presentation through our platform. It actually takes about five minutes from start to finish; it’s a four-minute elevator pitch. They just fill in some basic information like name and From the moment they make that presentation, we tell them within three days or less if we want to invite them to a partner meeting or not,” Brady explains, explaining that the company gets more than 3,000 proposals a year.
The company still keeps its promise to turn things around in three days. “If we invite them to a partner meeting, we give them a final decision the next day at five. So the whole process can be done in a week. You can make a presentation on Monday and you can have money in the bank on Friday, in a meaningful way.”
“We make a decision about people the next day, so we don’t have time to review what other companies are doing. We just say how much money we want to invest and what valuation ceiling we want to invest in.” Clancy Starr, Managing Partner, GoAhead Ventures
On the face of it, it looks like a founder-friendly way to distribute capital: Anyone can make a pitch, and once they do, the process is transparent, quick, and relatively streamlined. Most importantly, the fact that anyone can make a presentation on their website means that the company offers a level playing field for potential investments.
We do deals anywhere in the world. We cover all sectors. We are quite flexible and the only ‘gateway factor’ is that we only focus on the early stage. Apart from that, we only pick people, so we wanted to put all founders on an equal footing. “We felt that most other funds ended up only inviting founders to give a presentation if they had some kind of warm introduction or some kind of strong pedigree in their background that kind of gets them ahead,” Bradley said.
“We love being able to watch all these ‘apples to apples’ videos of trying to make a decision without other external factors. So far, it’s been great. We launched it around COVID and it really increased our deal flow in ways we couldn’t have imagined. I think it was kind of What is a win-win for both the founders and us.”
She believes choosing a fight with warm introductions — and replacing it with the hurdle of having to record a video — gave the company an advantage.
“There are a lot of really well-known companies out there. When you go to their website, you’ll find something like, ‘Find a partner for a warm introduction to partnership.’ For us start-up fund managers, the most frustrating thing about starting a venture capital fund is too much money. Donations. Everything about this operation sucks. You need to find a warm introduction to this billionaire. You need to find someone who knows someone who knows someone—the process isn’t quite clear,”
“You meet someone, they say, ‘Oh, that sounds great,’ and then they disappear. I know this happens to founders all the time too, and all the fine-tuning we’ve had on our process around the top of the funnel as well as making it transparent is primarily based on our frustration with Fundraising for our own money. We hated it so we decided to change it.”
The company doesn’t explicitly invest with a consensus-driven model: If one investor wants to write a check, they can, even if others think it’s a bad idea.