As a VC, I go through dozens of startups everyday. Most of them I leave back in the dung piles from which they came from. But once in awhile the siren call of the the fabled Unicorn can be heard.
Yes, that Unicorn - the startup that is our reason for being; the one that justifies our excessive management fees and the one that can bring an irrelevant VC untold riches and Silicon Valley stardom.
So what happens when you find one? Celebrate by running naked around a large pyre like the heathens of old, worshiping false idols? Or perhaps something more sedate like telling everyone of your good fortune on Twitter?
In reality, it’s nothing like that at all - VC’s are covetous by nature. If something as rare as a Unicorn is discovered, you can bet they will hoard it even better than this guy.
"I’m smiling cuz I gots me a Unicorn!"
With that said, I am excited to share with you my new “Chasing Unicorns” feature.
It will be a frequent post showcasing my personal deal flow and the startups that I believe to have Unicorn potential. I will also put on my VC thinking cap and do short analyses outlining things like the secret sauce along with other relevant insights.
So why would I do all this? For starters, I think it’s a great way to gauge the opinions of other VC’s. Eleanor Roosevelt once said:
“Great minds discuss ideas. Average minds discuss events. Small minds discuss people.”
We all like to stroke our own egos by claiming to be the perfect filter of dealflow these days but it’s far too easy to believe in your own hype especially if you are a VC whose had a few big wins under their belts.
By bringing my dealflow out into the limelight, I subject myself to the scrutiny and objective perspectives I otherwise wouldn’t have gotten on my own.
It’s also an issue of being the most helpful VC possible. I get pitched great ideas all the time but I am forced to reject some based on the fact that the startup does not fit within my realm of expertise. But if I could give them exposure and help them land the right investor, then why not share my dealflow publicly?
Doing this also has another positive effect: the increased exposure to promising startups breeds more competition and brings more high quality VC’s and angels to the table.
You should be fighting for the founders/startups that you believe in, otherwise you probably don’t deserve to be their investor.
Some of you might be saying “sure, that sounds nice, but having to compete with other investors can drive up valuations too much!” Well, if all you are worried about is the valuation instead of the founders and the potential of their ideas, maybe you are not the right investor to begin with!
With that said, the comments section will always be open to anyone who agrees/disagrees with me or has some personal insights to offer. It’s all about the free exchange of ideas.
In the end, not every startup I feature will turn out to be a Unicorn but a few might go on to do great things and even be acquired for a handsome sum. In other words, Chasing Unicorns can be a great way to increase your own deal flow!
Note: I will always fully disclose which startups I have a personal stake in, whether financial in nature or not.