For founders, finding the right VC to invest in their startup is crucial and a difficult task. With tens of thousands of VCs operating globally, investing in various industries, and at different stages, it can be overwhelming for founders to determine the best fit. In addition to finding a fit on basic parameters such as industry, check size, and round, founders are encouraged to get a better understanding of a VC’s reputation, investment style, and approach to working with startups, to help determine if the VC is a good fit for their startup.
The Venture Capital Net Promoter Score (NPS)
It’s common for businesses that have actual customers to gauge their level of satisfaction with the product or service by using a Net Promoter Score (NPS) survey. The purpose of the NPS is not only to determine customer satisfaction but also to assess the likelihood of a customer recommending the experience to others.
The creation of the NPS in the venture capital industry was motivated by a desire to have a more comprehensive and customer-centric approach to evaluating the success of a VC firm. By incorporating feedback from the startups and entrepreneurs in its portfolio, the NPS helps to provide a more well-rounded picture of a VC firm’s success, beyond just its financial performance.
The traditional metrics used to evaluate a VC firm’s success, such as the number and size of investments, the exit value of portfolio companies, and the overall financial return, provide valuable information about the financial performance of the firm. However, they do not provide insight into how the firm is perceived by the startups and entrepreneurs in its portfolio.
You can create your own NPS system by discovering points of interest that directly measure the level of satisfaction other founders have experienced, along with the VCs stance on supporting its founders. This will give you the insight to help you identify how they approach working with their portfolio companies and how they are perceived by the entrepreneurs in their portfolios.
Also, founders should consider their Investor Net Promoter Score for Startups. This is the percentage of your investors who would recommend you to potential customers, key hires, distribution partners, or follow on investors minus the percentage who wouldn’t. In theory, your Investor Net Promoter Score should be 100. Want to find out how to get there? Check out, How to Improve Your Investor NPS.
VC Friendliness Evaluation Points of Reference
Determining if a venture capitalist (VC) is founder-friendly can be challenging, as every founder has different needs and preferences. However, by doing some extra research, a founder can get a better understanding of a VC’s reputation, investment style, level of support and guidance provided to portfolio companies, and the level of alignment between the founder and the VC. These along with some of the following factors can help determine whether the given investor would make a good fit.
- Research the VC’s Reputation
- Start by researching the VC’s reputation and track record. Look for articles, blog posts, and social media posts that mention the VC and its investment style. Pay attention to the comments from founders and entrepreneurs who have received investments from the VC.
- Review the VC’s Portfolio
- Review the VC’s portfolio of companies and see if the founders of those companies have positive things to say about their experience working with the VC. This can give you an idea of the VC’s investment style and approach to working with startups.
- Ask for References
- Reach out to founders and entrepreneurs in the VC’s portfolio and ask for their perspective on working with the VC. This can give you a better understanding of the VC’s reputation and how they treat their portfolio companies.
- Meet with the VC in person
- Schedule a meeting with the VC to discuss your company and get a feel for their investment style and approach to working with startups. This can also give you an opportunity to see if there is a good personal chemistry between you and the VC.
- Consider the VC’s values and goals
- Look for a VC who shares similar values and goals with your company. This can include shared beliefs about the company’s mission, focus on sustainable business practices, or a similar approach to risk.
- Evaluate the VC’s support structure
- Consider the resources and support structure that the VC can provide, including access to potential customers, partners, and advisors. This can help you determine if the VC is able to provide valuable support to your company.
- Look at the VC’s communication style
- Look for a VC who has open and transparent communication and who responds promptly to questions and concerns. Good communication and transparency are key to building a positive relationship between a founder and a VC.
Ultimately, the most important factor in determining the “friendliness” of a VC firm is the fit between the founder and the VC, so it is crucial for founders to do their due diligence and carefully evaluate their options before making a decision.
Resources for Startups
- FoundersFeedback, gathers feedback from entrepreneurs through tailor-made surveys to help VCs improve their processes and relations with start-up founders.
- For VC’s investment, team, and company information Crunchbase, CB Insights, and Visible’s own Connect Investor Database.
- Y Combinator: What Founder Friendly Actually Means
Resources for VCs
- Visible Guide: VC Portfolio Support Best Practices
- Visible Guide: [Webinar Recording] Building Scalable Portfolio Support
- Visible Guide: 5 Ways to Help your Portfolio Companies Find Talent
- Visible Guide: How to Plan a Top-Tier CEO Summit
Visible’s Top Picks for Founder-Friendly VCs
To help further guide founders in their search for investment, Visible has created Connect Investor Database to support our community of founders in their fundraising efforts. Check out the profiles for our top picks below or search the full Connect database here.
Resources used for the list include the articles below, nominations from founders within the Visible network, and VCs who have proven their founder-friendliness claims.
Forum Ventures
“Since 2014, we’ve worked with 300+ SaaS founders. We know how to help founders build a sustainable business by acquiring customers and raising additional capital. Once we invest in a company, we walk hand in hand with founders as a fractional co-founder during this crucial part of their journey. This includes:
- Dedicated tactical sessions on:
- How to build their pitch deck
- Product market fit
- GTM and sales strategies / acquiring first customers etc.
- Mentor matching for 1:1 support
- A dedicated community team to help founders connect with strategic hires, professional networks/mentors and provide resources + almost anything else founders need to grow and scale (founders are part of this community long after they have finished our program!)
- No BS feedback (we truly care about the individuals who are part of our portfolio and we want to see them succeed. This means being open and honest with them. We want to both celebrate their wins and, more importantly, be a support system and their go-to-person during hiccups)
By focusing on these areas with our founders, we’ve achieved an average fund-through-rate of 65% and NPS of 70.2.” – Maggie Bolt Marketing Manager at Forum Ventures
Some great founder testimonials can be found here 🙂
Thesis: B2B SaaS; Future of Work, E-commerce enablement, Supply Chain & Logistics, Marketplace, Fintech, Healthcare.
Location: New York City, San Francisco, and Toronto, United States
Funding stage: Pre-Seed, Seed
Learn more about Forum here →
K50 Ventures
“K50 Ventures offers a robust, peer-to-peer founder community to save founders time and money while making the founder journey less lonely. As early stage investors to over 170 companies, we understand the many challenges of building at the earliest stage, and offer strategic partnerships, workshops, resources and events that help our founders with everything from PR and brand to fundraising support, in addition to facilitating impactful and meaningful introductions.” – Jessica Spivack Lowenstein Head of Platform @K50
About: K50 Ventures is the most trusted first-check investor for mission-driven founders building a better future for the 99%. We invest up to $2M in pre-seed and seed-stage companies in the US and LATAM that are prioritizing access, affordability, and well-being across the categories of Health, Finance, and Work.
K50 partners with those who refuse to accept the status quo; those who have a vision for how to radically improve daily life for everyone – in our local communities, and around the globe.
Funding stage: Pre-Seed, Seed
Learn more about K50 Ventures here →
Colle Capital
“The VC/Founder dynamic is fragile and peculiar; we are not coworkers and no one is anyone’s boss: we are partners and ideally friends. The best relationships between VCs and founders (and frankly between people generally) are built on a foundation of radical honesty, transparency and timely feedback. My founders come to me first with their problems because they trust I will do my utmost to help with urgency and without judgment. They also know that I’m always available just to talk and that I love celebrating the wins just as much as they do.” – Douglas Benowitz Principal at Colle Capital /// Nominated by Pulkit Jaiswal co-founder of Haystacks.AI
About: Colle Capital is a data focused and opportunistic global technology venture fund.
Location: New York, United States
Funding stage: Seed, Series A
Learn more about Colle Capital here →
Groove Capital
“First and foremost, I’ve been a founder, so I can empathize. Some days are incredible, and many are confusing and full of doubt; so I try to go out of my way to acknowledge their courage. At the stage we invest it doesn’t make a lot of sense to be heavily involved. We are there to help where we can, and encourage them to develop a trust in their instincts. If they need someone to push back, we’ll push back. If they need to talk it out, we’ll listen. Our job is to help them be successful, so that my investors can be successful.” – Reed Robinson, Founder & Partner at Groove Capital
Thesis: Groove Capital is where entrepreneurs in Minnesota go to get their first institutional investment. We partner with great teams, who have demonstrated an ability to execute, with some evidence of a defensible advantage, in a market that is compelling.
Location: Minneapolis, Minnesota, United States
Funding stage: Pre-Seed, Angel, Seed
Learn more about Groove Capital here →
Bread and Butter Ventures
“We promise to always be transparent and give our honest opinion with startups. To me that is founder friendly.” –Brett Brohl Managing Partner at Bread and Butter Ventures
About: Bread and Butter Ventures is an early-stage venture capital firm based in Minnesota, the Bread and Butter State, investing globally while leveraging our state and region’s unparalleled access to strong corporate connections, commercial opportunities, and industry expertise for the benefit of our founders.
Thesis: Investing in amazing founders, focusing on several core sectors of the economy: food/ag tech, health tech and enterprise SaaS
Location: Minneapolis, Minnesota, United States
Funding stage: Seed, Series A
Learn more about Bread and Butter Ventures here →
MS&AD Ventures
“We love being ‘in the trenches with the founders. Our team consists of former operators, entrepreneurs, and industry experts and we bring it all to the table when supporting our founders. We are flexible with ownership requirements. We’re as active as possible but it’s up to the founders how much they want us to be involved. This includes board seats as well. We stay out of the way if they don’t need us.” – Tiffine Wang Partner at MS&AD Ventures
About: MS&AD Ventures is an early stage global fund that invest in Insurtech, Fintech, Mobility, Digital Health, Enterprise and beyond. MS&AD has a footprint in over 50 different countries with strong presence in Japan and the ASEAN region.
Location: Menlo Park, United States
Learn more about MS&AD Ventures here →
11 Tribes Ventures
“Our 2% commitment of capital to founder well-being/ resilience and our Venture Partner Platform exist to help our founding teams build exceptional businesses without burning out or cratering their personal lives.” Kristina Chapple Director at 11 Tribes Ventures
Thesis: 11 Tribes Ventures is an early-stage venture fund that proactively invests in the well-being of entrepreneurs. The fund is radical in its allocation of resources to fund founder wellbeing, putting real dollars towards their mental, emotional, and spiritual health. They are proving that healthy founders will lead to healthy returns without compromising mission or profitability.
Investment geography: Chicago, Illinois, United States
Funding stage: Seed, Series A
Learn more about 11 Tribes Ventures here →
Antler
About: Antler is a global startup generator and early-stage VC that is building the next big wave of tech. With the mission to turn exceptional individuals into great founders, Antler aims to create thousands of companies globally.
Thesis: We identify and invest in exceptional people
Investment geography: Agnostic (Global)
Funding stage: Pre-Seed, Seed
Learn more about Antler here →
Venrock
About: Venrock is a venture capital firm investing in technology and healthcare companies.
Location: Palo Alto, California, United States
Funding stage: Pre-Seed, Seed, Series A, Series B, Growth
Learn more about Venrock here →
Greylock
About: This venture capital firm invests in all stages, exclusively in consumer and enterprise software companies. It led the Series B round for both Facebook and Linkedin
Location: Menlo Park, California, United States
Funding stage: Pre-Seed, Seed, Series A, Series B, Growth
Learn more about Greylock here →
First Round Capital
About: This venture capital firm invests in all stages, exclusively in consumer and enterprise software companies. It led the Series B round for both Facebook and Linkedin
Location: Menlo Park, California, United States
Funding stage: Pre-Seed, Seed, Series A, Series B, Growth
Learn more about First Round Capital here →
Insight Partners
About: Insight Partners is the most trusted scale-up firm in the software industry.
Thesis: We support companies in good times, as well as challenging ones.
Location: New York, New York, United States
Funding stage: Pre-Seed, Seed, Series A, Series B, Series C, Growth
Learn more about Insight Partners here →
Privilège Ventures
About: Privilège Ventures is a Swiss-based Venture Capital firm, authorized by the Swiss Financial Market Supervisory Authority (FINMA, www.finma.ch) as venture capital asset manager, investing in promising early-stage startups. With offices in Lugano, Zurich and Boston, we aim to support young founders on a mission to build the future. Our unique values derive from previous experiences as founders, entrepreneurs, operators and investors. We provide unceasing support, expertise, and valuable network access to help entrepreneurs forge ahead.
Location: Switzerland
Funding stage:Seed
Learn more about Privilège Ventures here →
Founder Collective
About: Founder Collective is a seed-stage venture capital firm that has invested in over 300 startups, including Uber, Airtable, PillPack, SeatGeek, The Trade Desk, Whoop, and Cruise. Founder Collective’s mission is to be the most aligned fund for founders at the seed stage. FC has offices in NYC and Cambridge, MA and has been the top-rated seed fund on the Forbes Midas list for four of the last five years.
Thesis: Our mission is to be the most aligned fund for Founders at the seed stage.
Location: Cambridge, Massachusetts, United States
Funding stage: Seed
Learn more about Founder Collective here →
Heron Rock
“As a recovering entrepreneur, I am deeply empathic to the struggles and challenges that founders, especially first-time founders face. I play an active and engaged role in coaching and supporting each founder that I invest in and almost every single founder I’ve ever invested in can testify to the impact I’ve had on them.” – Tom Williams sole GP of Heron Rock
Thesis: I invest as early as possible often before anyone else other than a single founder is in place
Location: San Francisco, California, United States
Funding stage: Pre-Seed, Accelerator
Learn more about Heron Rock here →
Start Your Next Round with Visible
We believe great outcomes happen when founders forge relationships with investors and potential investors. We created our Connect Investor Database to help you in the first step of this journey.
Instead of wasting time trying to figure out investor fit and profile for their given stage and industry, we created filters allowing you to find VCs and accelerators who are looking to invest in companies like you. Check out all our investors here and filter as needed.
After learning more about them with the profile information and resources given you can reach out to them with a tailored email. To help craft that first email check out 5 Strategies for Cold Emailing Potential Investors and How to Cold Email Investors: A Video by Michael Seibel of YC.
After finding the right Investor you can create a personalized investor database with Visible. Combine qualified investors from Visible Connect with your own investor lists to share targeted Updates, decks, and dashboards. Start your free trial here.
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