No GPs Allowed ⚡ #11

stuck between the seed & series A, more thoughts on bereal's exit, + defunct credit card startups

Author

Zehra Naqvi
June 20, 2024

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TLDR from Z

I am currently finishing up this edition of No GPs Allowed from a breakfast event (that I’m hosting) with 100 people around me.

Part of my motivation in transitioning from founding/operating to investing was to delve deeper into the complexity of a Series A raise. Having worked with startups from pre-seed through series B, I've always noticed that the A round is the most daunting, challenging, and difficult to secure. It seemed that if a company managed to raise an A, a B round was almost a given, and if they had a pre-seed, a seed round was expected. However, the transition from seed to Series A was a significant hurdle. The Series A, I've come to realize, is the most elusive round to raise. This is a perspective I've gained since my venture into VC.

  • Pre-seed: no metrics, typically investing off an idea and more qualitative traction

  • Seed: early proof points, PMF maybe or path to PMF, early signs of quantitative traction but not enough for a trend to be determined

  • Series A: There is enough data to ascertain early signs of a trend (flat lining retention, linear or exponential growth), qualitative traction (partnerships, LOI), a future product roadmap, and PMF 100%. However, there is not enough data to invest purely based on quantitative analysis. There is also a degree of risk-taking and intangibles. Series A VCs have entirely different POVs on the traction expected at this stage (based on my experience).

  • Series B: enough data for the entire fundraising round to be entirely determined on metrics & quantifiable information

What do you think?

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Investor Feature: Johnnie Yu

How and why did you want to become a VC? I grew up wanting to be a filmmaker, and went to NYU for that reason. It was maybe the first week of school when I realized Hollywood wasn't the industry I wanted to be in, followed by a brief quarter-life crisis. I learned over time that everything I knew about making great films — making something happen from nothing, managing people with big ideas, attracting attention on a low budget, gaffer-taping things together to make something work (both literally and metaphorically) — all of that translates over into building great brands. Venture is scrappy. That happened to be when GenZ VCs was taking off, so I met some really cool people over Slack (this was at the beginning of COVID). After Zehra rejected me from the Republic Venture Fellows program [ZN: sorry Johnnie], I was introduced to my friends at HBCUvc, who put me through a 2-week training program and connected me to Listen for an internship over my junior year summer. Beginning of senior year, I was offered a full-time role working alongside some of the most talented + hardworking people I've met. I did contemplate dropping out of school, but was encouraged not to :)

What’s your investment philosophy in 5 words? Brands (at the) tipping point (of) behavior shifts.

Strangest place you’ve met a founder? Jazz night at The Red Pavilion in Brooklyn... but we knew each other already so more of a run-in. Does that count?

#1 tip for folks trying to break into VC & new VCs?  Depending on what kind of firm you're at or where you're aiming for, there are so many ways for junior investors to add value that isn't necessarily deal sourcing. With a healthy amount of socializing + networking, deal flow comes naturally with time spent in the industry. Rather than scouting to break in or add value, I'd spend my time elsewhere... learn a new tool, develop a perspective, start a side project, etc. Maybe a hot take, maybe not, but I think venture capital is ultimately a game of risk mitigation + capital allocation. Not saying high quality assets aren't import, because they are, but you can theoretically have high quality assets and bad fund returns. Especially for analyst/associate roles, I think value is created for your team through your input in the middle of the deal funnel, i.e. due diligence, rather than sourcing.

Investor you admire most? I happen to be friends already with a lot of investors I admire most, Z included. But in the spirit of the question, my answer might have to be James Cameron. He's a bit of a nerd who happens to be great at a lot of the things that he does. He's an Academy Award winning filmmaker, National Geographic explorer-in-resident, submarine designer (he designed + piloted the Deepsea Challenger), and also angel investor. My understanding is he made 'Titanic' in order to fund deep-ocean expeditions, not because he particularly wanted to make the film. When he learned about other filmmakers diving to the Titanic to make an IMAX movie, he said "I'll make a Hollywood movie to pay for an expedition and do the same thing." He subsequently made 33 dives to the Titanic. His obsession, conviction, and domain expertise aside, I also just want to make a good film one day, too.

Coming in two weeks! 1 GP Allowed will be the monthly premium version of No GPs Allowed. This is a deeply intentional, focused interview.

Break into VC: Jobs

Full-time Investor

Stripes is hiring a Consumer Investor. Apply here!

Anthemis is hiring for multiple investing roles. Apply here!

Alumni Ventures is hiring for multiple investing roles. Apply here!

FJ Labs is hiring an investor. Apply here!

Cowboy Ventures is hiring an Investment Associate. Apply here!

Compound is hiring an investor. Apply here!

Unshackled Ventures is hiring an Investment Analyst. Apply here!

Commerce Ventures is hiring a Senior Associate. Apply here!

Flourish Ventures is hiring an investment associate. Apply here!

Pear VC is hiring an Investment Associate - AI and Enterprise. Apply here!

Entrepreneur First is hiring multiple Analysts/Associates. Apply here!

Full-time Platform

Cowboy Ventures is hiring a Chief of Staff. Apply here!

Internship

Cerberus Capital Management is hiring for a 6-month fellowship. Apply here!  

Necessary Ventures is hiring an intern. Apply here!  

Expanding Capital is hiring an intern. Apply here!  

Northzone is hiring a Platform Summer Intern. Apply here!  

VC $$$

You can drop your salary details here (anonymously) to be shared in future editions. VC compensation is an exceptionally opaque part of the “breaking into VC” process. This section aims to act as: a reference for you as you negotiate your salary and to showcase just how different compensation is across fund size, titles, and more.

  • Title: Analyst

  • Fund Size: $500M-1B

  • Base Salary: $85,000

  • Cash Bonus: $25,000

  • Carry: none

Events (for VCs)

monday 6/24

tuesday 6/25

thursday 6/26

post nytw later in june!

monday - wednesday 7/15 to 7/17

wednesday 7/17

Wanted to dedicate this edition of The Z List’s friend’s section to the Inside Summit, happening on July 17th in NYC. As a part of The Room Podcast community, I’m super excited to extend 20% off tickets for a limited time (use code: ZEHRA20) Inside Summit is going to be the tech event of the summer - and very different from any other conference you've been to. Here's some of what you will experience at Inside Summit: 

  • Founder & funder matching for those fundraising or looking to build their network

  • Founder-to-founder buddy matching for founders to make new friends and mentors (make founder friends that are a stage ahead of you)

  • Vendor & customer warm introductions

  • Small-group conversations & workshops oriented around tactical topics that aren’t happening anywhere else

  • Free headshots

  • Goodie-bag full of products from some of the hottest DTC brands

  • Consumer brand “market” access

  • After-party with open bar & bites

Resources: Discounts + Tools