First, you should read this FAQ thoroughly. If you're still interested, you can email your business plan to us. See our Contact Us page. If there is a prototype or demo site, we'd be delighted to know about that.
Smart, nice founders, significant technology, identifiable (ideally quantifiable) customer value. You also need to be here in the Bay Area.
We like internet software projects with software-as-a-service/subscription business models above all else. We occasionally do consumer-facing projects as well (often ad-supported). We've done a lot of email/messaging/communications projects over the years. We don't do hardware.
It helps a lot if we've worked with your team before, or know someone who has. We value intelligence, personal values and attitude over experience. We have a 'no a$$holes' policy - so if you are one of those, even a genius with a perfect track record and sure-fire business plan, we wish you the best of luck, albeit elsewhere.
The technology has got to be hard to implement and significant. If the thing is basically trivial, how much fun will we really have building it?
Early stage. 90% of our investments are either seed/pre-venture or alongside the very first round of venture capital. We do follow-on financings, but often below our pro-rata share. In that sense, our equity position tends to track the employees', not the investors'.
The majority of our investments have pre-money valuations near or below $5,000,000. When we invest pre-venture, our investment frequently takes the form of a convertible note whose conversion cap is of a similar amount.
Our initial investment is most often in the $25,000 - $250,000 range. Because we generally spend a lot of time helping our companies (and often join the board of directors, if asked) we blend the purchased preferred stock with common stock (often as options).
We'll consider either role. The difference to us is primarily a structural governance issue, not a committment issue. In the world of investors, we're usually considered very "active" even when we're not on the board.
Here are some structural reasons why we're not a VC firm:
We positively hope so! You should ask them. We go way out of our way to ensure this. We keep our amount invested modest (by VC standards) so as not to unduly infringe on the VC's ownership position. On the other hand, we'll take fiduciary responsibility and join the board, which helps to spread the workload around (they are very busy). Plus, we'll buy lunch whenever they ask.
There are some really great angel investors in the world and we love to work with them and learn from them. We are often more actively involved in companies than many angels. For example, we frequently join the board of directors of the companies in which we invest. Many "angels" do their investing on the side, We do this as our full-time, all-consuming jobs. Some angels are only about raising money: we don't view our role as helping companies get funded (which we do) and then walking away (which we don't) - we're in it for the long haul.
We're not like incubators who typically extract a very significant ownership position by providing lots of infrastructure and some working capital. Any infrastructure we provide (soda, junk food, computers, network bandwidth, places to crash) is on us and we buy our stock just like anyone else. If the "bubble" incubators were trying to be get-rich-quick schemes, then Inventures is more like a lose-money-slowly scheme. We need to be successful so we can keep making new investments and having fun.
Sure, but once we're both serious about working together. As a matter of policy, we don't sign NDAs just to read your business plan. We're not trying to steal your ideas (if we did that, no one would ever want to work with us. And besides, NDAs limit disclosure, not idea theft). It's just that we get hundreds of plans and we don't have the bandwidth to review everyone's NDA legalese.
If you don't trust us, please don't send us your plan.
We know this works for some people, but we've not had great success with being on Advisory Boards. We really like to have more "skin in the game" and have found the Advisory Boards to be sort of a halfway commitment. Although this is probably an indictment of our own abilities, we're generally not advisory board sorts of folks. Sorry.