By: Dr. Marlo Rencher
I recently completed an online certificate program for Venture Capital University, which provides an excellent foundation of knowledge for emerging investors. It’s a collaboration between the University of California’s Berkeley Center for Law and Business and the National Venture Capital Association.
The Investment Thesis
This video is the first of a three-part series of my key takeaways from taking this venture finance course. My first takeaway is about the investment thesis. An investment thesis is a brief statement about the type of companies that an investor invests in, what industries those companies represent, what stage they might be in and where they might be located.
I noticed that the successful investors the course featured had, over time, gotten really precise about their thesis. My ah-ha moment was when I realized that for successful investors, an investment thesis is not just a slogan or mission statement.
It is their literal formula for success. They are betting millions on this formula, and any entrepreneur pitching to them MUST make sure that they are aligned with the thesis.
So for entrepreneurs – take the investment thesis SERIOUSLY, especially with experienced investors. Don’t try to force a fit if your company isn’t aligned with the thesis.
Advice for Investors
For investors – be scientific with your thesis. Over time, you will build up a body of knowledge, a network and a track record with a particular kind of company. You may adjust your thesis as your capabilities adjust, but it is your unique value proposition as an investor.
In my next video, I’ll talk about the importance of scale. See you then. Thanks for watching this video.