[YAN] Reputation, Portfolio Announcements, and The Present
Omi, OneCode, and SuperBeings
Yet Another Newsletter | Issue 11
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“Your reputation precedes you, right; for the most part, people know what type of business you do, what you have a reputation for, and the way you carry yourself.” - Jay Z
The more I think about it, the more it becomes clear to me that the only way to propel the early-stage high-risk ecosystem of startups is to ensure that it becomes high-trust first.
High trust —> partnering-up in the earliest of stages with high-quality talent —> faster market validation & product shipping —> acceleration of growth, for everyone.
Your actions and body of work come together to build your ‘reputation’ which in turn determines future partnerships (dealflows, co-founding opportunities, etc). It’s not rocket science, yet somehow difficult to grasp and exercise.
There are definitely many factors that when assembled together determine success in your craft and in like many industries, ‘reputation’ matters in Venture Capital as well.
“Offers made by VCs with a high reputation are three times more likely to be accepted, and high-reputation VCs acquire start-up equity at a 10–14% discount” - research
Reputation goes both ways though, from an investor’s end as well as a founder’s. If you’re a founder fundraising, do good with the investors who stuck it out with you, offered capital when the typical investor FOMO wasn’t the driver for your fundraise. Honor the terms of your agreement, understand that there were economic risks that the investor agreed to take on when extending their time, energy, and capital (social and otherwise).
Similarly, the same bar needs to be upheld for VCs. The terms you offer as an investor, how you choose to maintain captable dynamics and relationships, how you turn an opportunity down - all of this determines your reputation. In a mature ecosystem where with each passing year capital is reduced to nothing but a commodity, I’d like to believe that investors will be held accountable for more.
Cloud Capital: Portfolio Announcements
As someone who recently started their career in venture capital, I like to look at my portfolio to try to remember the nuances and contours of those deals, the dynamics that I had to deal with, and question my thesis. I am sure that a lot of other players in the ecosystem do the same as well. Your portfolio speaks about your access, judgment, and conviction; both future LPs and founders gauge your quality via it.
But that got me revisiting the million-dollar question- how do angels and VCs win allocation into competitive deals with zero track record? Assuming that you aren’t a tech veteran, a celebrity, or related to a massive business conglomerate - getting yourself into competitive and especially tier-1 VC-led deals is quite the challenge.
At the risk of sounding extremely cryptic, one thing that I have now experienced over some 18 transactions in the last 18 months is that it takes a lot of grunt work to ensure that your allocation and their respective terms are secured because venture capital can be ultra-competitive. And while there’s ample content available out there, I don’t see a lot of India-first dos and dont’s publicly documented. Maybe it’s what I’ll candidly try to pen down via my newsletter as much as possible in the future.
But for now, wanted to share few publicly announced deals of Cloud Capital with you all:
Prashan Agarwal, Aniket Lila launch online spiritual and wellness platform OMI
OneCode raises $5M led by Sequoia’s Surge and Nexus Venture Partners
Last Tuesday, the Milwaukee Bucks grabbed the 2021 NBA Championship Trophy with the Greek Freak shooting 50 points in the finals - exhilarating, to say the least! I am more of a Stephen Curry fan and therefore by extension, a Dubs fan - BUT, I am glad that if not Curry, Giannis delivered this sweet victory and displayed that he’s more than just an MVP material - he’s a championship winner.
By now, mostly the entire internet-verse is raving over Giannis’ game 5 post-match speech but I thought it’s still best to share these words of wisdom with the good folks reading my newsletter.
‘When you focus on the past, that’s your ego. I kind of try to focus on the moment, in the present. That’s humility.’
With that folks, I end today’s piece. What will you be working on this week? No matter what you achieved already, what more will you try to accomplish? Maybe that’s the secret of consistent high-quality output; to zone in on the moment and just focus on your present.