VC as a Product

The idea that a venture fund is a product offered to founders, not only a service. The Saved-from-Roam note below states the premise: venture funds have traditionally resembled service firms (consulting, banking) and will evolve to look more like product businesses, with defined “SKUs”. In Investing 101 2.0 it is listed under “The Philosophy” alongside Bifurcation in Investing, Data in Investing and VC Platform.

Two saved pieces carry the argument:

• Playing Different Games (Everett Randle): “A fund’s duty to Founders is to offer them an attractive enough ‘product’ such that Founders choose to exchange equity in their businesses for the Fund’s cash over another competing fund’s cash.” The piece describes Tiger Global’s product as a high price, a quick and minimally distracting fundraise, and staying out of the way afterward.
• Balaji Srinivasan on distribution: “Capital is a commodity. Choose investors on the basis of their distribution.” He names consumer distribution (social media and brand) and enterprise distribution (business relationships, M&A help) as what distinguishes investors once capital is on tap from retail platforms such as AngelList.

Where this appears

• Capital is a Commodity. Choose… (tweet)
• Listened to a Convo W-… (tweet)
• Playing Different Games
• Investing 101 2.0

Saved from Roam

• Venture funds traditionally are more akin to service firms (e.g. consulting, banking, etc.)
• They’re going to evolve to become more like product businesses (e.g. what products are you offering? What “SKUs”?)