Starting With Transparency

We believe that it is important to start any relationship with transparency and hence we present each of our newly invested startups with our Investment Memo that outlines our rationale for investing.

We present the startup’s founders the Investment Memo prior to our first (post-investment) meeting - outlined below. This approach provides maximum transparency and a level-set between ourselves as investors and the founders to ensure that there are no misunderstandings.

Our aim for providing the startups with our Investment Memo is to highlight how we think about all the different elements of the startup including the team, market opportunity etc. But probably most importantly, a core part of our Investment Memo is what we perceive are the key risks associated with the startup during the current funding round and how we think about mitigating these risks.

It is the “risk” part of the memo that provides the greatest opportunity to debate and reconcile the differences that might exist between ourselves as investors and the founding team.  This might not be resolved but helps to ensure that both parties understand each other's point of view and opinion.

In addition, the Investment Memo also highlights how we believe Dynamo Ventures can add value based upon its knowledge, experience and networks. By explicitly providing this we make ourselves more accountable to the founders.

Building A Transparent Relationship

We believe that maintaining open lines of communication is key to ensuring transparency and clarity as we kick off a long-term relationship. This also helps to ensure we remain responsive and supportive of our portfolio. We aim to achieve that in one of two ways:

Immediately after investment, we set up a Slack channel with all members of the Dynamo team and the startup’s founders.  This approach is aimed at sharing information between all the parties without unnecessarily clogging up their inboxes. It is meant to be informal and helpful rather than an unnecessary burden.  Different startups have a different cadence and approach to using the channel.

In parallel to this, we also set up a weekly 30 min check-in for the first 8 to 12 weeks post-investment.  This naturally tapers down to once every 2 weeks after this initial period. At times, we might recommend a longer check-in slot to dig in deeper on a particular topic. For startups with a deeptech bent, we think it makes sense to check in every 2 weeks rather than weekly. Ultimately, it is our preference to have shorter and more frequent discussions every couple of weeks than operate on a monthly cadence - things change quickly in a startup!

This has several benefits:

1. Getting to know you and your startup better. No matter how much time we spend with you and the due diligence we undertake during the investment process, it is no substitute for working alongside you to better understand the nuances of the team and your startup. We believe that leaning into that relationship early allows for greater transparency and trust.  The calls allow us to stay up to date but more importantly allow us to provide timely support as appropriate and have contextually-relevant and meaningful discussions around the problems and opportunities you face as a founder.
2. Introduce our industry network and expertise. As is identified in our Investment Memo, we expect to help by leveraging our long-standing contacts and networks within supply chain and mobility as well as the experience and expertise of the Dynamo Ventures team. This can help further customer development and/or secure new customers, as well as help with hiring from the industry. Furthermore, we actively support our portfolio to raise follow-on funding from our investor network.
3. Agreeing on the metrics required for the next investment round. A good investor will be able to provide good insight into the metrics required for your next investment round - based upon historical data and also prevailing market conditions. Aligning expectations early allows us to better understand not just the targets for the next round but also the month to month growth that is needed - thereby allowing us to flag any shortcomings early and help course-correct as needed.

On-going Support

We are problem solvers who are ready to roll up our sleeves to help our founders achieve product market fit. We don’t have all the answers but can help figure them out. Our on-going support manifests itself in:

• Rigorous discussions around customer discovery and how that informs a deep and insightful understanding of the problem
• Debating and aligning on the right approach to solving the problem and building a product that can achieve product/market fit
• Guidance and insight on how to set up and structure an early go-to-market effort that includes sales, marketing, and customer success/operations. We LOVE making introductions to customers and partners who are in our corporate network
• Identifying key talent gaps and working with the founders to recruit and retain exceptional talent
• Planning and executing on a fundraise that helps founders identify and close the best VC firm and Partners for the next stage

Our late-stage founders will share that while we focus our time working with founders at the pre-seed and seed stage, we never step away. We are always available by phone, email, or text to support our founders and their companies.

Related Reading

Part 1: What We Invest In
Part 2: How We Invest