Principles
- Albert Einstein
In Data Ventures we deeply believe that mutual trust and the vision of what your project might become in the future is the foundation of successful cooperation between a startup and venture capital firm. To develop such cooperation, it is vital to establish specific frameworks and principles as its fundamental base.
Below we present the general rules and tips that will help you move freely through the Data Ventures investment process and will be the first step towards our successful cooperation.
Please read it carefully! Unless you accept our principles we won’t move forward with the investment process.
Investment Mandate - is your project for us?
- We search for B2B companies which apply data analytics to change business models, eliminate middlemen and liberate data.
- We focus on Fintech, DevOps and SaaS verticals and Artificial Intelligence, Blockchain and Big Data technologies.
- We would rather not invest in services companies, we strongly prefer product companies.
- Algorithms should be the foundation of your competitive advantage. We are co-financed by the Nation Center for Research & Development (Poland), so we invest in projects in which we can conclude an element of R&D.
With whom do we want to work with?
We believe that in business people are more important than the idea. What we are looking for in order to marry you:
- authenticity and real passion for the project
- a “doer” mentality
- lean and customer development approach
- an absolute focus on the project,
- addressing a small market segment at the outset, but with a greater vision of what the product may become in the future
- deep customer, competition and market trends knowledge
- “skin in the game”
First contact - just fill in the application!
- If you do not have any intro, our DV application for startups should be your first step in contacting us.
- In the application please tell us what is exactly the problem for your client, how you are going to fix it and why it is better this way. Too many times we’ve had conversations with guys who can’t answer these questions!
- On the other hand don’t worry that your idea is not perfect yet. Our role is to help you discover the value proposition you want to bring to this world. We often start a dialogue with entrepreneurs before they even think about
Materials - what else should you provide
- Don’t skip the attachments field in the DV application for startups!
- Be concise and take care of the high quality of the materials you send. No one likes to read a wall of unformatted, waffling text and it can simply lead to the rejection of a valuable project by us.
- Remember that Pitchdeck is a must-have.
- Take some time and send us your lean canvas. It isn’t obligatory but strongly recommended. It will show us your lean approach and how well you understand your business (it will also help you!).
Investment Process and Timeline - what it looks like and how long it takes
- We follow 6-step process that starts with DV application for startups and ends with a money transfer.
- Every startup should follow the same process.
- The whole process lasts up to 2 months. (We want to cut it to one month – we are also learning!)
- Please be patient we spend a tremendous amount of time on most of the projects, thus we are not the fastest gun in town. Nevertheless we wish to deliver you valuable feedback even if we decide not to invest.
- Please see more details here→.
How we evaluate projects
- Team track record, motivation and lean approach.
- Micro-segment to focus on.
- Deep knowledge of customer, competition and market trends.
- Unique selling point.
- Big vision of what project might become in the future.
- Size of Total Addressable Market.
NDAs
- In general NDAs don’t help . As prospective investors very often we just can’t sign them.
- Please share what you feel comfortable sharing and remember that most of the value is created by the execution, not the idea itself (!)
- If you still want us to sign an NDA you should know that we NEVER sign an NDA before first meeting/call and we can only use our NDA template.
- It is customary that we sign NDAs during the workshop phase.
Negotiations of Term Sheet
- We use only our standardised document , which is compliant with global standards.
- We don’t negotiate the document, only its’ parametres.
Negotiations of Investment Agreement
- We use only our standardised documents with parametres taken from the Term Sheet.
- We would rather not negotiate the structure of the document.
- If negotiations last more than 2-3 weeks we would rather withdraw. We are not lawyers nor investment bankers, but entrepreneurs. This time is more than enough to dig into business.
Valuation
- 500k – 1000k EUR at Seed Round.
- 1000k – 2000k EUR at Early Growth Round.
- Exceptions may apply.
Remuneration of Founders
- “Decent renumeration” is a keyword here. This means that we want you to make enough to cover basic living costs but not enough to feel too comfortable and/or cover a lavish lifestyle.
- “I don’t need any money in my startup, I will work for free” – we also don’t believe that working for free is at all beneficial as it creates defocus and builds the wrong incentives for the entrepreneurs.
- Please read more here.
Red Flags - what stops us from investing?
We will run away in panic when we see:
- A team not 100% focused on the project (side projects).
- A lack of transparency/not telling the truth.
- Intellectual Property doesn’t belong to the startup.
- A product has a low level of defensibility.
- Startup doesn’t know its KPI’s.
- TAM is too small.
- Startup doesn’t know the competition inside-out and can’t position the value proposition clearly.
- A lack of “skin in the game”.
- Startup doesn’t focus on a narrow and precise target group in the phase of initial growth (instead of big markets, many segments).