Press Release
Venture capitalists
When you talk to someone who says they represent a VC fund, it’s important to know who you are talking to. There are two types of people: investing partners, and everyone else. It used to be that you could identify a person who had the juice to decide whether to fund a deal or not by the title on their business card. Nowadays, VC firms hand out the “partner” title widely in their organizations, even to junior deal professionals who used to be referred to as “principals,” “directors” or “associates.” Other times, particularly in large, multi-stage VC funds, partners can designate senior professionals with non-investment functions, like recruiting, legal, corporate development, accounting or finance. Why do they do this? VC firms don’t want you to know that the person you are dealing with does not have the authority to fund a deal or not. Generally, a “general partner” designates someone who can lead a VC firm’s investment in a deal. “Venture partners” and “operating partners” typically refer to part time executives who can help a GP manage the portfolio or are experts in their field. “Entrepreneurs-in-residence” or “EIRs” typically refer to former CEO’s or entrepreneurs who look at deals and hope to be dropped into a new business venture that the VC firm funds, or to source a deal that the VC will fund. “Principals,” “directors” and “analysts” refer to execution professionals who conduct due diligence, manage dealflow, and generally execute on transactions and manage the portfolio. Other than the “general partner,” none of these other professionals have the power to sponsor an investment for approval by a VC fund’s investment committee, which is typically the group of GPs that vote on whether to fund a deal or not. If in doubt, study the VC’s website, and you will likely get a flavor for who you are talking to and what is their level of authority.
How do venture investors structure their investments?
Most venture capital funds define themselves by the types of investments they do, the sectors that they seek to disrupt, and the stage of investment they like to come in.
In the post-pandemic world, VC firms generally do not fund companies before they have a minimum viable product, demonstrated product-market fit or a full founder team. This is the world of friends, family, business angels and micro-seed funds. For early stage companies, the typical tools of financing are SAFEs (simple agreements for future equity), convertible notes and series seed (any series of preferred stock that does not have a letter in front of it).
Keep Reading:- https://medium.com/@lehotlouis/venture-capital-inside-out-who-they-are-what-types-of-deals-they-do-f093e3917a1b
