Differentiating in VC, why 186?
Introduction
Thankfully, for the sake of the innovation economy there is an unprecedented amount of capital available to startups globally, especially the US. Despite media headlines of today’s VC “down turn”, it is important to consider that seed stage investment in Q4 2018, Q4 2019, and Q4 2022 reached $4B, $4.5B, and $6.9B respectively. Various options of venture capital focus, whether by stage, sector, region or some other form of specialization have never been in more abundance.
186 Ventures has its own focus and unique qualities, but even then we imagine it is difficult for founders to understand how we, as VCs, truly differentiate from all of the others out there. This article is a reflection and attempt to add clarity to “why 186” if any aspiring founder is considering working with 186 Ventures. Differentiation is extremely relative, so I will try to keep this as concrete as possible.
Founder first
You’ve probably heard the expression “founder first” before, but we have lived it first hand! Whether starting a company from scratch, launching a product that has reached millions of users, and raising multiple rounds of venture financing, or helping a company in growth mode scale to IPO, we’ve experienced it first hand. The differentiating point for us is that we put a lot of effort into ensuring we are there for founders through the thick and thin, available to text, talk live, etc, and we also put a lot of effort into being patient, especially during times of uncertainty and when the path forward may not seem clear.
Creating a relatable venture product is important for our number one customer– the founder– and we build most of our values around this. For example, countless times our founders come to us vs. others (larger VCs often times) on the cap table to work through difficult, sensitive company building scenarios, e.g. cutting staff, making key hires, and we work hard to ensure this can remain to be the case as we scale our firm.
Relentless focus on the early stage, specific to seed
There are many established venture firms that touch on the early stage as part of their investment strategy, and maybe even specific to the seed stage. At 186, all we think about is the seed stage and every element (both positive and negative) that impacts the founder and company journey throughout inception to Series A.
Understandably, we also think beyond the Series A when supporting our growing companies, but the majority of our time is explicitly focused at the seed stage. Focus from your VC matters, and even more importantly, commitment to the stage of the company you are at on behalf of the entire firm is arguably just as important. We don’t have any of the artificial constraints that may otherwise come with working with firms that are thinking about increasing ownership over time, and sometimes this is better aligned to some founder journeys.
Proactive with “indirect” value add
At 186 we have institutionalized various frameworks designed to make the founding team’s job easier. By no means are we suggesting that it is an investor’s job to help an entrepreneur build the business. Ultimately, we recognize that investors usually have little impact on a company’s success in the grand scheme of things; however, there are things we strongly believe early stage VCs should bring to the table while the executive team does the hard work in building the business.
For example, one big differentiator is that we strive to keep our vast capital network of downstream VCs (Series A, B) apprised of new 186 portfolio companies and existing portfolio companies who will be looking to raise follow-on capital in the next 9–12 months. This framework allows 186 to accomplish three things for their founders:
- This allows us to gather feedback on behalf of our founders and thus help inform how they should think about their general financing strategy and company milestones
- It allows us to generate momentum on behalf of the founders and take a little of the heavy lifting off their shoulders by introducing them to potential Series A leads
- It lays the groundwork for founders to hit the ground running once they are ready to raise a subsequent follow on financing and already have an idea of who they may like as a prospective Series A lead
Nationwide community activation and network
In light of our former entrepreneurial, operator, and investor experiences (50+ 186 backed founding teams to date), we are fortunate to have very dense networks of founders, builders, mentors / advisors, customers, and VC collaborators across key innovation capitals within the US. Over the last two years, we have implemented various frameworks that allow us to activate this world class network of collaborators with founder and operator specific programming.
By remaining authentically active with these categories of industry professionals, we keep key relationships warm so that we can activate them for our founders. Whether they are highly curated monthly dinners we host within specific themes or founder / operators groups, or large scale meetups we host across Boston, NYC, and even SF– they all serve as a multi-faceted effort to support our founders and more broadly the innovation economy.
Just to give an example of some of the positive examples of 186 community activation, in Boston alone we host the largest monthly blockchain meet up and we have recently stood up one of the largest monthly AI meet ups to further bolster the innovation economy.
Founder, operator aligned LPs
Lastly, the LP base that we are extremely grateful to have at 186 features some of the leading entrepreneurs who span across all industries we invest in. We wouldn’t be in business if it were not for them and we are proud of the support they have also offered our portfolio companies directly at key inflection points. We definitely encourage all founders to always ask who the VC’s LPs are and what kind of relationship fund managers may have with them– it can be very telling!
Conclusion
We continue to have a very long road ahead as we build out a decades-long enduring venture brand that plays its part in the greater innovation economy evolution. Never before has it been so important to ensure that we as an industry can adequately support the next generation of founders. The world’s largest problems will be solved with technology and it is our responsibility to help ensure the right combination of institutional knowledge and support is not the blocker in the equation.
As we continue to build out our team and LP base over the years, we remain firmly committed to holding ourselves to the utmost standards of empathizing and supporting early stage founders, regardless of the effort and pain it requires to do so. If you’re an operator, founder, or any other stakeholder around the table and want to give us a shout, feel free to reach out via email hello@186ventures.com or you can find us on Twitter– @186ventures.
