Early stage venture is artisanal, even at scale

There were no rules or playbooks when we started our venture capital firm.

By design, we wanted to start the work and be open to the challenges and opportunities of deep tech ventures and founders.

We believe in the investor as an artisan. We are learning a craft and applying it to support the growth of complex things, making them ‘by hand’.

We are now at a point that many startups arrive at, where we need to adapt to our scale or risk losing effectiveness.

What happens as an early-stage venture firm scales

We are hands-on in our firm. The investor that backs a company continues to support them over time. We will spend time most weeks with each company we invest in, sometimes a few days a week in one company that needs our support.

As it is, this doesn’t scale well.

Here’s what has happened over our first five years.

  • We have invested in more companies. e.g. I have led investments in ten so far.
  • Each of those companies has grown in size and complexity. Projects we support get bigger. Both opportunities and catastrophes.
  • Each of those companies raises money once per year on average. E.g. I am supporting six capital raises currently.
  • The firm has become better known, and the inbound pipeline has grown stronger in volume and quality.
  • The team has expanded, with effort now needing to go into capability building in others.

This scales workload like a fractal.

Do we let the machine in?

This has led us, inevitably, to the question of scale. The machine is banging at the door, wanting to be let in. The ‘machine’ in this case is our firm as a collection of products and services.

We asked ourselves if we would let it in at our last offsite.

We decided no — kind of.

The real impact comes from personal relationships.

  • Even before we invest, while speaking to people in our community, we can deliver value if we do this directly rather than having gatekeepers to triage. We can also understand potential investments better.
  • Having invested, a trusting relationship must lie at the core of the relationship between the firm and the company. It gets tough sometimes. Arm’s length, cookie-cutter approaches don’t work.
  • Mechanising things too much removes the soul and makes the firm overly homogenous. While we have themes and beliefs that define the firm, we wanted to allow for the edge that comes from a diverse team operating with each person’s unique instincts.

So how will we scale?

We will provide our artisanal investment team with a layer of support to scale their work.

Where best practice can be deployed quickly, we will continue to build operational teams and agency relationships around:

  • Talent & culture.
  • Messaging & branding.
  • Voice & media.
  • Co-investor network nurture + growth.
  • Research network nurture + growth.

The test will be how much wasted time and sub-optimal effort we can remove from the investment team’s work.

Instead of trawling through Gmail and LinkedIn for someone who can help in our network, start the process with a request into the right team, then be the person to manage this stream of work for the portfolio company.

OK, so we let the machine in a bit.

Let’s see how we go.

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Phil Morle

Phil Morle

Deep tech VC — Main Sequence Ventures. Ecosystem builder. Maker. Director. Startup Scientist.