YOUR EYE ON INNOVATIVE MACHINE LEARNING SOLVING REAL WORLD PROBLEMS
Azafran Capital Partners
INSIGHTS As Early Stage VC Investors, Our GP’s Deep Founder Experience + Global Network Provide the Critical Difference In the final issue of our Special Report Series, we highlight the intrinsic value and importance of combining a founder’s perspective with a global network of experts as principal ingredients for success. If you want to start or become great at fly fishing, all the reading, videos and study will not net that first rainbow trout. You must go through hours of trudging through mud and creek, untangling fishing line from the bushes, mending cuts from the hook, making cast after cast, there is no substitute. When investing in early stage companies, a deep perspective of the founder and startups is gained by investors who travelled a similar journey, spending years in the trenches understanding the market problem, assembling the team, productizing the solution to the problem, getting funding, going to market and identifying the exit trajectory. Some say it takes a degree of insanity to go through the startup process and it’s certainly not for everyone as it takes melding your passion with an incredible amount of faith, stamina, fortitude and vision. For Azafran, our LPs and portfolio companies, it starts with our intrinsic DNA as founders and operators - our General Partners have started and operated dozens of companies with 13 exits, participated in 120 M&As, creating $9B of enterprise value between them. Just as important for our formula is operationalizing our Global Network which we have been building for decades alongside all our ventures. Azafran’s Global Network, now reaches all corners of the globe with tens of thousands of experts, CEOs and founders at our reach. When researching and compiling background data for this issue, our team was surprised to find that only 40% of GPs at top tier VC firms have direct experience as startup founders and less than 20% of the GPs have experience as founders among the rest of firms surveyed. 100% of Azafran’s GPs are founders and 50% of the entire Azafran team are founders. (see survey results and accompanying chart on Page Two) This dynamic is particularly important in Early Stage investment, as founders and younger companies need hands-on assistance in a number of areas including building out the team, productizing, market development, connecting with partners and supply chain. The chart at the top of Page Two and associated research comes from the TechCrunch article, Entrepreneurial Experience Separates Top VCs From Other Investors - which concludes with their Recipe for Success: (continued on Page Two) Azafran INSIGHTS © Azafran Capital Partners 2020 - All Rights Reserved
SPECIAL REPORT SERIES Part Three
part three FOCUS Azafran Capital Partners is a 2020 vintage early stage venture fund investing in companies ($2M to $8M) that are using deep learning and machine learning, emphasizing voice, acoustics and imagery datasets in the health / wellness, and IoT / enterprise markets. Part One of our Special Report Series focuses on both the venture market and road ahead as seen through the lens of Azafran’s Investment Thesis, taking into account new global realities. Part Two looks at voice, acoustics and imagery being upgraded to mission - critical plus markets and research that tie to the Azafran Thesis. Part Three focuses on the Azafran team and network: Our founder’s perspective as operators, technologists, and investors plus operationalizing our global network. How this combination lays the foundation for seeking, finding, evaluating, investing in and helping grow disruptive, great companies to reach their full potential.
So what is it about entrepreneurial experience that seems to prepare people to become top-tier VC investors? It is likely a combination of three things. The first is knowledge. Investors who have worked as founders and C-level executives have an inside perspective on what it takes to make a company scale and succeed. This expertise is difficult to replicate in any other way. The second factor is the personal network that comes from working inside an entrepreneurial company. Investors can look to past colleagues at their former companies to help source investments and make useful connections for the entrepreneurs in their portfolios. Finally, there is probably an attraction factor at work, as well. Some founders are likely to prefer to partner with an investor who has been on a similar journey.” - Entrepreneurial Experience Separates Top VCs From Other Investors, Rhett Morris, TechCrunch Special Report Series, Part Three - Page One