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Pre-founder: People-focused businesses
Good talent is good talent. Getting back to basics: investing in talent.
This is a formal proposition to relook at the ever growing and popular stage of “prefounder” and why your fund probably isn’t doing it.
Staging
My first few months full-time in VC happened around a VC bubble. As you can imagine, I didn’t care too much about it being that I was starting off at an emerging, pre-seed/seed/A-ish kind of firm. As time went on and I befriended some other investors that worked specifically at pre-seed-to-series-A, I found myself familiar to stage-specific, and most importantly price-specific funds. It always starts off with the price amount preferred.
We like to be one of the first (30) checks in.
Does not equate to:
We like to lead or semi-lead the absolute first round.
And at first, I thought this was all standardized: “Early….” “Earliest stages”, etc.
Had to mean whatever that first round is… because they want to work with that founder. Because they’re “worth the price.”
But, what I’ve come to find out is that stages are complete malarkey.
Define “talent”
talent: An individual person with expertise, and maybe network, in an industry.
Talent: A “star quality”, independently-thinking individual. An “it-factor” person with creativity and skill in a very specific space.
Why I care
In the startup ecosystem, “talent” has been broken up into two buckets: technical and nontechnical talent. Although there seems to be a never-ending shortage of technical talent, there’s no debate that almost half of venture dollars spent go to GTM and ads - and someone has to run that part.
My main petition is that there might be a shortage of GTM hires with enough product and SV context to really rip it.
Talent issues
There are also two main issues to talent, regardless of startup or not: recruitment and retention. For VC funds, in particular, retention in particular has been entirely difficult.
Fit
Founder→Market Fit: Founder has experienced the problem, has potential to sell accurately to potential Product→Market Fit: A product that solves a problem so well it generates demand within a market.
Founder→Customer Fit: Built in distribution to potential customers. This can be someone with a lot of followers or someone with a niche dentistry blog. Or a previous sales operator with a rolodex of potential customers. For this blog, I’m mostly thinking about a founder with online influence.