Why we invested. Venture capital firms share why they backed startups

Tl;dr: If you are interested to know why venture capital firms invested in startups, fortunately, many VCs write blogs I term “Why we invested” since that’s often the title they use. This is a mega-collection of VCs sharing these thoughts that I spent a few days collecting. The value for investors is to gather learnings for your own decision-making process. The benefit to startups is to understand what VCs look for so you can get funded too. I have collated 93 firms and 826 blogs. You’re welcome.

Blog is split into two parts

I have split the blog into two parts:

Some pointers: I got annoyed looking for all these blogs and wondered why the heck write them if they are so hard to find? So I started writing, and well I ended up on a rant. This is likely to be of very little interest to founders. It’s actionable for VCs.
The mega list of “why we invested”: I’ve split up all of the VCs’ blogs by firm and chucked in the logo to make things a little more pretty. There are 826 blogs from 93 VC firms. I couldn’t be bothered to build filters. Didn’t see how it was valuable.

Note on who was included:

If blogs from a firm looked rubbish I didn’t include any. Maybe they might have a few good ones, but life’s too short…
If their blogs looked like a press release, they didn’t have a snowball’s chance of being included
Quality does vary a lot! As one might expect, some of the large funds do a consistently solid job, but smaller firms actually can often deep dive into far more detail. Don’t ignore smaller firms just because they aren’t a big brand. a16z aren’t terribly interesting, but because I know everyone will be interested, I included them anyway

Tips on writing your “why we invested” blogs

Here are some observations having done a massive amount of dull as balls research and copy/paste.

Understand your audience / DO NOT write press releases

One weird thing I find is that some firms write PR statements. I mean the full-on normal press release with the about sections, quotes etc. No one gives a shite about a press release. If you’re a VC reading this, don’t be that dude.

Always think about why you are writing these blogs. There are only two audiences:

Prospective LPs: They check up to see how smart you are, especially if you tell them that your content gets you deal flow
Prospective founders to invest in: Your other audience is founders who are getting to know you before you know they are interested. The best founders will probably check up on you. If you write genuinely quality content, you can demonstrate you are a thought leader so you are more than a checkbook (allegedly). We will talk more about being interesting in other points

Write content worth reading

This is the single best piece of advice I can give you. Write awesome content. Or maybe don’t bother at all?

It doesn’t have to be crazy long, it needs to be “worth reading”.

If you are going to make your partners/principals/analysts and god forbid, paying some content monkey to do it for you (Don’t bother- it’s a waste of money as the content isn’t worth reading) the content needs to lead to the specific outcomes you are looking for.

I’ve learned that if you write awesome content worth reading it gets read. Shareable content is shared. The best sites are remembered.

Eh sites are eh. They do not break through the noise.

For example, I’ve been reading and making content for a long time. There are some VCs I know I will enjoy reading. I won’t go so far as to feel “I know them”. I like Rob Go at NextView because he typically writes what I would. Mark Suster at Upfront always does a great job. You likely have your own examples. Think why you like their blog, come back to it, and copy them shamelessly till you know better and have your own style.

Know why you’re writing, be personable, and show up

The entire point of writing is to build a relationship with founders so they come to you for money when they are fundable to you.

Jason Kan is a little annoying to me, but the dude keeps making content fricking everywhere (he’s not an investor). It’s not that great, but he just keeps turning up and he even admits when he is wrong (i.e. tweet about product vs distribution… cough, Atrium??). I know “I can make better content” but the thing is “done is better than perfect”- whilst I’m thinking about being better, he has posted 10x more. He just puts out content which is good enough and that’s how you win (with the “be everywhere” strategy).

Gary V is Gary V.

I’m a nobody, but you know exactly what you are getting with me. I swear, I say what I think to help you, I make the most complete content, I whatever else I am to you.

Who are you to your target audience?

My advice is:

Write to your audience: Founders do not care that you’re excited to invest. The only people who do are the founders you invested in, but they would rather that you do your pro-rata… New founders want to learn from you and how to get money from you asap so they can focus on, you know, actually doing their fricking job which is building 10x value to customers
Keep showing up: I don’t mean get on Tik Tok (Turner Novak is funny though). Keep consistently churning out your “why we invested” blogs. I excluded VCs from the list if they had one or two blogs, so no backlinks for the ones that didn’t write enough
Have a personality: Corporate-style blogs are boring and exhausting. Be you. You might lose some people, but the ones you want will love you.

Structure your blogs (easier to write)

The best blogs have a consistent structure.

Map out the sections you want to address, make a template, stick to it, fill it in.

If you have many people in your firm, share the template structure. If you have bags of management fees, have a content person be the boss and improve things before they go live.

Bowery Capital are basic, they go with:

Who?
What?
Why?
Where?

That’s fine, but I don’t think that’s super directive to you to write quality content.

What content to include / how to structure your blog

The structure of a “why we invested” blog is very similar (IMHO) to how I structure a pitch deck for a startup (vc, hedge fund, property fund etc).

Industry setup
Changes in dynamics enabling the opportunity
The problems customers in the industry face
Why the competition don’t solve this niche
That this company is solving it the correct way and why
How they think about things different (think: contrarian and right)
Why you like the team (founder/market fit)
What they have achieved to justify the investment
The market size and the opportunity
Your investment thesis
Who else invested and your usual humble brag bla bla about being excited

I wrote that stream of consciousness in one go so don’t assume this is the perfect structure.

Now, yes… that is a shite load of work, but to be honest, you should have done the work on it all already. And if you didn’t you should start doing so (in my humble opinion).

If you are like “Alexander, FML, I can’t write, I have kids, I’m on 15 boards bla..” then my advice is to focus on the why.

Focus on the why and cut the BS if you are short of time

Everyone writes guff content. Think people who write press releases if you don’t know what I mean. I do it too, but purposefully to “attempt” to inject humor and a personable feeling. That’s all good and well if you are trying to build a brand, which… ironically is exactly what you are trying to do! I can be brutalistic in content, but I choose not to. I write structured outlines and fill in content. I want you to enjoy your time with me learning so you get to know me. But I could make this blog a fricking lot shorter if I just gave you core knowledge bullet points. I don’t think you want that. And my real goal is to help you to learn to think for yourself. That’s hard to achieve with skeleton text.

But sure, if you are short of time, then you can just cut the shite and “write a short letter” (“sorry I didn’t have time to write a long one”) if you are intellectually capable.

Case study: I mentor some GPs. One changed their LP update email structure. It was data points rather than a “hedge fund letter”. My point to her was 1/ this will save you so much time, but 2/ you’re losing the opportunity to build relationships with the LPs by showing how smart you are. So when it comes to being the principal of running your own fund, did you earn their trust quarterly so they will write you a check? Short term, consistent pain = long term gain

Be absolutely brutal about only writing smart stuff and the bits people are genuinely interested in reading. But you need to know what to write.

I would:

Define your audience: is it startup founders for deal flow, or is it LPs for investment?
Define their interest: Understand what your audience is interested in
Write what they want to know: No shite Sherlock…

A short, quality “why we invested” might ideally look like:

Industry explainer
How this aligns with our investment thesis
How we met the founder (how they got in contact as for some founders this is scary)
Why we invested (money shot for founders)
[What we didn’t like] – delicate, but other founders would love the learnings… (this is a cultural thing for you and founders- think Buffer)
How long the process took in detail from meet to wire (meetings, what info we needed, what we focused on…)
Other similar kinds of startups you want “so reach out if you match”

Eh, I wrote that in 3 minutes. I could write something smarter in an hour, which I’m not going to do (yes, you can hire me to help). If you understand how the fundraising process works in detail, you can deconstruct the parts and explain to them so that prospective founders know how deals get done with you which is super baller!

Think how many founders google for how “YC applications work” if they want to get in? Believe me, they want to know your コナミコマンド code (nerd drop).

Actually, this is a pretty cool idea (I’m thinking and writing) you could double down on.

Founders are super busy and have no idea about raising. Even successful ones know they don’t do the basics well. You explaining how a raise goes down with you can help you on so many levels. Again, I should write (yet another) a blog on this.

Finally, just because there are 7 points there, doesn’t mean this has to be a huge ass blog. You just need to give very concise, action-orientated points.

Write the blog once the deal is done and the investment memo is written

You wrote an investment memo, right?

You had to go through the crap of getting your deal through the Monday Morning Meeting.

You know why you invested in the deal.

The knowledge is in your head. It is fresh.

Now is the time to write your “why we invested blog”.

The longer time goes on, the harder it will take, the longer it will take, and the lower the quality the deal will be.

Do yourself a favor and make writing this blog a normal priority. Do it within a week. Perhaps set a “two days and it needs to be done” limit.

Add your investment thesis

You ‘hopefully’ wrote an investment thesis before you wrote a check. Why not share it?

If there is something particularly delicate, then redact it. But what do you really have to hide here? Probably that you wrote a rubbish thesis. The fact you know you are going to share one publicly will force you to put in more effort and to learn.

I wrote a blog called “Ask dumb questions. It’s the smartest thing you can do“. The core premise is you can only be ignorant once if you ask someone to explain it. So along this thread, my point is don’t be afraid to put yourself out there. Everyone is as clueless as you are, the difference is some put in the effort to improve.

There aren’t many investment thesis’ public, but I’ve tried to collate them here: Investment Thesis Collection from Venture Capital Firms

Add your investment memo

Now, here is the exact moment when you are going to balk and have a mini panic attack. Share your investment memo. Yes, it can be a redacted version when you talk about the team, concerns etc.

Very few firms share theirs (BVP shares the most). And all the little guys who do always share how vulnerable they feel sharing theirs.

Now, if you are a larger firm, you may have to put this through legal and your partners. But, if you guys are so smart, what do you have to hide?

This is an amazing way to repurpose work and show how smart you think you are.

I can explain all the reasons why you should share and mitigate your concerns, but you should be able to figure that out yourself. If you want me to do a blog on this, ask in the comments.

Here are all the investment memos I’ve been able to find: Venture Capital Investment Memo Collection

Yes, you can write nerdy articles

In one blog I added, the Partner said that “writing doesn’t come normally to me, so I needed a reason to write” bla bla.

I know for a fact that so many people who could teach others don’t, because they have an inferiority complex, an unreasonable standard to attain, etc. Fill in the psychological issue holding you back.

You’re a VC. You likely got good grades. You talk and do research for a living.

Think about the calls you do with founders (where you try to sound smart), the conversations with peers, chats at Philz Coffee… That is interesting to your audience.

Just write what you think. I guarantee you there is an audience for it and your content is better than you think.

I have this huge ass blog. I don’t know how to write. I just started writing when I was hungover on a Saturday. I didn’t give a shite, I had no expectation, and I learned to write (hopefully). And if it isn’t obvious, this is my stream of consciousness. I just add headers to make my thoughts structured. If someone with a checklist of learning disabilities like mwe can make content, so can you.

Ok, I’m getting bored now. I’ll add some small detail stuff so people actually read your content!

Write consistent titles

The larger firms are consistent. My preferred title is “Why we invested in [STARTUP]”. If founders are looking for your blogs, it makes them obvious. Of course, the best solution is to also categorize so they come up in a feed.

Many firms switcharoo titles as the person who wrote it decided.

A few firms just write the name of the startup. That’s the older firms. That’s also crappy SEO and discovery.

Make discovery easy

Most sites do a dog shite attempt at site discovery for their blogs. Only a few firms made “why we invested” blogs easy to find in any shape or form. 97% of VCs write random-ass titles. Some well-known firms (well the ones who blog a lot anyway) are very Paul Graham about it. They just write the name of the company and bury it in a time-based archive. It’s not ideal, but at least it is consistent.

Blog title: As above, have a consistent title
Filter: Make all your blogs come out of a filter button
Filter title: Make it “Why we invested”
Location: Make your blog link in the menu obvious. I like “blog”. Many want to be fancy pants and write “insights” or something. Just make things obvious

I don’t want to keep writing about this as it feels like stuff you will delegate anyway. The issue is that 95% of VC blog structures suck, so passing off the buck is not working. This is ironic since if you spend time writing, it needs to be found. Think about bears shitting in the woods

Use images

You want your blogs to be read, and text blocks are dull (feck, I need to do better myself!). Use images where you can. The standard is an image of the team. And yes, most look smug and are wearing Patagonia.

If you want to be a boss, then add in some fancy flow charts graphics. Think a competitive landscape image. People love this stuff.

I hate stock imagery. I mean smart images which yes, take time.

Cut the humble brags

It’s exhausting how everyone adds how humbled and excited they are. It’s cliche. It adds no value. I guarantee you that the last paragraph is about “how excited we are to partner with this startup”. I know you will do it anyway, just know it is annoying ;).

Blog is split into two parts

Tips on writing your “why we invested” blogs

Understand your audience / DO NOT write press releases

Write content worth reading

Know why you’re writing, be personable, and show up

Structure your blogs (easier to write)

What content to include / how to structure your blog

Focus on the why and cut the BS if you are short of time

Write the blog once the deal is done and the investment memo is written

Add your investment thesis

Add your investment memo

Yes, you can write nerdy articles

Write consistent titles

Make discovery easy

Use images

Cut the humble brags

Questions?

“Why we invested in” the collection

100x

7wireventures

8VC

Accel

Albion VC

A16z

Adams Street

Adara Ventures

Alate Partners

Amplify

aster

Atomico

B Capital

Balderton

Benchmark Capital

Bessemer Venture Partners

Blackbird

Blume

Building Ventures

Bowery Capital

BWM iVentures

Bonfire Ventures

byfounders

btov Partners

Calm Fund

Canaan

Canva Ventures

Catalyst Fund

Clean Energy Ventures

Companyon Ventures

Craft Ventures

DataDrivenInvestor

Downing

EchoVC

Emergence

FINCA Ventures

Flourish Ventures

Forward Partners

Foundation Capital

Foundry Group

Frontier Ventures

Fuel Capital

Future Positive Capital

GD10 Ventures

GoingVC

Greylock

Haystack

Heartland Ventures

Impact Engine

INDEX Ventures

InMotion

Ironspring Ventures

Lightrock

Lightspeed

Madrona

Master Ventures

Menlo Ventures

MCJ Collective

Mosaic Ventures

MultiCoin Capital

National Grid Partners

NextView Partners