Checking Boxes: Our Investment Thesis & Parameters

This is part 2 of a 5-part series. If you haven’t done so already, you can read the first post here.

Very often when we meet founders, whether they are pitching their company for investment or just asking for our insight during one of one of our mentor program meetings, they ask what would make them a “sure venture capital investment opportunity”. The short answer we give is that there is no such thing, because every single VC firm has different investment theses/parameters. One perspective we can offer is the overview below of our own strategy.

Laconia’s Story: Who We Are & Why We Do This

Holding true to our core values of transparency, collaboration, and community, one of the things we’ve decided to do this year is publicly share our story, thesis, and process. We hope to demystify venture capital’s insularity and enable founders to more easily access and navigate the venture world. We are therefore publishing the following posts over the next few weeks:

  1. Laconia’s Story: Who We Are & Why We Do This (this blog)
  2. Checking Boxes: Our Investment Thesis & Parameters
  3. Who You Are: The Entrepreneurs We Seek
  4. Diving In: What to Expect in the Investment Process
  5. Welcome to the Family: Managing Laconia’s Portfolio

So, how did we get here?

My co-founder David Arcara  and I met after living parallel lives for decades. Both of us came up through the ranks in sales, marketing, and management roles, eventually founding, running, and selling multiple media & tech companies. Much of this involved raising money.

Intrigued by the other side of the venture capital table, we had both begun to angel invest, eventually crossing paths in 2010 as members of the New York Angels. During the next 18 months as our friendship grew, we spent more and more time co-investing together and with others, until we reached the point of “What’s next? Where can we go with this?”

The Undervalued and Overlooked Skills I Learned Interning with the Laconia Crew

It takes serious guts to be a venture capitalist. One must be willing to take enormous risks for uncertain returns. It’s definitely not a stable, clear-cut path. Perhaps this was what drew me to entrepreneurship and venture capital. The idea that you can make it big or lose it all is unnerving but fascinating to me.

I was first introduced to Laconia Capital Group by Peter Wiener, a former manager whom I had worked with at Bank of America Merrill Lynch. Laconia Capital Group’s venture capital funds focus on late seed B2B SaaS startups in the Northeastern US with monthly recurring revenues of at least $25,000. Going into the internship, I did not know what to expect. I knew that I wanted to learn more about the business and how venture capitalists evaluated startups, but that was it.

Four months later, I can say that, without a doubt, my internship at Laconia has been nothing short of a phenomenal experience. I have learned so much from Jeff, David, DLee, and Geri. I sat in on pitch meetings, portfolio company strategy calls, and partners’ meetings. I crafted market research for portfolio companies. I wrote investment memos for potential deals. I even helped source potential deals. In fact, the internship never felt like work. Rather, it was more like attending office hours with three extremely intelligent and business savvy professors and one brilliant TA.

Chasing the Money: Making Capital a Strategy

Over the past 9 months, we have screened thousands of companies, had introductory meetings with about 200 founders, and conducted deep due diligence on about a dozen. Whether we’re doing a full dive into a company’s history, projections, and vision, or just having a quick chat about short-term goals, one topic that almost always comes up is the alignment of entrepreneurs’ operating strategy with a thoughtful and defined capital strategy.

We have been repeatedly surprised by how few entrepreneurs see capital as a strategic activity. Raising money for the vast majority of entrepreneurs we encounter (even some really excellent operators) is a glorified form of securing what may be referred to as allowance money. VCs are pseudo-parents, there for the asking in order to get cash in one’s pocket!

But, venture capital functions so very differently from merely being money in the bank. And trouble will brew if it’s not seen in its full utility.

Swimming through the Buzzwords: Our VC Summer Internship

If you ever want to make a college student cringe, usually all you have to do is ask, “Have you found a summer internship yet?” Luckily, after developing mild carpal tunnel syndrome from scrolling through our respective college career sites for countless hours, we were both given the opportunity to enter the venture capital world as summer interns at Laconia Capital Group. Just completing our sophomore years at Penn and NYU, we began our internships at Laconia unsure of what our summers had in store for us. On each of our first days, we walked into the office uncertain but excited to gain experience in an industry that would give us exposure to a variety of businesses and accomplished people. However, ten weeks later, we now find ourselves participating in office discussions with confidence and an eagerness to absorb all of the information thrown our way. As our internships come to an end, we reflect on our experiences and the invaluable lessons we have learned this summer. We’ve outlined the top five takeaways from this summer that are relevant to those working in the VC industry, as well as those thinking about their own business.

So, You Bet Your SaaS on IoT!

Various estimates peg the number of Internet of Things (IoT) devices deployed in the market to be between 6 to 7 billion, and that number is expected to grow over 8 times in the next 3 years. To illustrate an example of an IoT device, imagine a parking spot with sensors installed. These sensors send data on the availability of that parking spot to a local internet-enabled gateway that ultimately communicates the information to the car drivers (through their navigation systems) in that vicinity – in this case, and in any similar scenario in which sensors enable communication between physical objects and Internet-enabled systems, we are talking about IoT devices.

Ford Credit and AutoFi Debut Platform for Faster, Smoother, Simpler Digital Vehicle Buying and Financing

DEARBORN, Mich.–(BUSINESS WIRE)–

There’s a new way for customers to purchase or finance a new Ford vehicle in minutes – right from a dealership website from anywhere, on any device – through a new platform from Ford Motor Credit Company and financial technology company AutoFi.

In addition, Ford Credit has made an investment in AutoFi as Ford Credit continues pursuing technological advances to make the financing experience better.

“By combining our fast and efficient credit-decision process with AutoFi’s online capability, we are making the customer experience faster, smoother and simpler,” said Lee Jelenic, Ford Credit director of mobility. “With its experience in used-vehicle online financing and well-developed platform, AutoFi makes it easier for us to adopt new technology quickly to meet evolving consumer expectations.”