Origins - Inside Venture Capital, Hosted by a GP and an LP

Minisode: Seed vs Growth Investing - What Changes and What Stays the Same

Oct 15, 2024

Two seasoned venture capitalists delve into the pivotal roles of team dynamics and strategic pivots in startup success. They explore the crucial question of what changes and what remains constant in seed versus growth investing. Key discussions include the value of customer insights and the balance between innovation and competition. The importance of timing and understanding market nuances also takes center stage, emphasizing that at its core, venture capital is about backing the right people.

18:52

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Episode notes

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Quick takeaways

The critical role of the team behind a startup is fundamental across both seed and growth stages, as successful backing relies on identifying capable leadership for potential IPOs.

Effective pivots can yield significant returns when grounded in a company's original vision, contrasting small iterations with radical transformations in business models.

Deep dives

The Role of Team in Investor Decisions

A significant takeaway was the emphasis on the importance of the team behind a startup, as highlighted by Jay. He stressed that identifying whether a team can lead the company to an IPO is crucial, not just for early-stage investors but also for those involved in growth stages. This perspective underscores a commonality in both stages of investment, where backing people is fundamental. While metrics like customer acquisition costs and data analysis are often the focus at growth stages, the necessity for a solid team remains a core attribute that investors prioritize.

Intro

4min

The Art of the Pivot in Investing

5min

Navigating Innovation and Competition in Venture Capital

2min

Navigating Investment Complexities

5min

Navigating Customer Insights in Venture Capital

3min

Nick Chirls, GP at Asylum Ventures, and Beezer Clarkson, LP at Sapphire Partners, unpack their recent conversation with Jai Das, President + Partner at Sapphire Ventures and Mike Maples, Co-Founder + Partner at Floodgate, to answer their burning question: What changes in the way seed and growth investors think, and what stays the same? They discuss the crushing importance of team no matter the stage; the parallels in LP land (at the end of the day, you’re just backing people); the difference between small iterations on a business model vs a radical remaking of a company; and the imperfect information you get at Seed vs the luxury of canvasing an entire landscape at growth via customer calls and key metrics.

Learn more about Sapphire Partners: https://sapphireventures.com/sapphire-partners/

Learn more about OpenLP: https://openlp.sapphireventures.com/

Learn more about Asylum Ventures: asylum.vc

Learn more about Floodgate: https://www.floodgate.com/

Subscribe to the OpenLP newsletter for a monthly roundup of the latest venture insights, including the newest Origins episodes, delivered straight to your inbox.

CHAPTERS:

0:00-Intro & Takeaways

1:20-Is This the Team That’s Going to IPO?

4:02-Early Stage Pivots

7:44-How Hard a Pivot is Too Hard?

12:23-LP Strategy for Picking Managers

13:09-The Importance of Timing

15:59-You Need to Call the Customers

18:05-Outro

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