With a drier than normal investment scene, founders are looking for more efficient ways to hit the right VCs. To that end, over the past few weeks, thousands of founders have applied for land capital through a common application, but instead of hoping to land in a university, they hope to secure capital from top investors. The platform they use is Seed Checks, launched by venture capitalist and growth marketer Julian Shapiro about a month ago. Founders are invited to apply using a one-minute form that asks for a deck, memo, and region. The app is then released to 16 investors, including Sarah Guo of Conviction, Immad Akhund of Mercury and Cindy Bi of CapitalX – all of whom have one-way or one-on-one check writing capabilities.
There aren’t many restrictions, although the group only invests in startups worth less than $20 million (a quick scan of submissions suggests most applications are valued between $5-10 million). of dollars). Additionally, the Seed Checks team does not invest in any CPG or DTC products. Applications are reviewed every two weeks and, if a startup is of interest, founders will receive a response within two weeks of deck submission. So far, the tool is resonating: after launching on Twitter and Product Hunt, Seed Checks received 2,000 applications in 2 weeks.
SmartPass co-founder Peter Luba, who is building a digital pass for schools, was among the first batch of applications. The founder is embarking on the fundraising process for the very first time since deciding to transform Smartpass from a side gig into a full-time startup. Since applying to Seed Checks, he has started conversations with four of the investors in the cohort.
Luba discovered seed checks while scrolling on TikTok. Until then, the process of sending mass emails to many investors at once was more informal. The closest thing to a common app-style pitch process was through super-connectors in Silicon Valley, which would connect him with 10 investors all on a single thread (talk about FOMO).
“Fundraising is a full-time job, it takes a lot of time and I want to get back to building,” Luba said. “It’s not that it’s not fun, but it’s not what we’re building a business for.”
Some are not immediately thrilled with the idea of automation. Sanjay Goel, founder of NachoNacho, was initially skeptical of the idea of a platform that tries to increase fundraising. He changed his perspective when he saw the “very smart” investors involved. He wants to know if caliber will help improve the scale of this effort – but as a three-time founder, Goel still believes fundraising is “a relationship-based business”. The entrepreneur, who also invests, says platforms like Seed Checks can be a source of deal-flow, but he wouldn’t want it to be the only one.
Shapiro sees the platform as filling a gap in a market dominated by accelerators that offer standard agreement and programming in exchange for equity. Seed Checks receives applications from founders who historically did not apply to accelerators because they did not need help or introduction to a wide range of investors; they just wanted access to the faces of the platform. The platform isn’t alone in trying the common style of presenting apps. Afore Ventures launched a joint application program in January; 8 weeks ago, it received 1,600 applications from startups, or about 200 applications per week. The pool of investors grew from 10 investors to 30, then to 52 individuals or companies.
Bi, a solo general partner who builds CapitalX, has yet to make any investments in the initiative — but she said Seed Checks is more effective than its own inbox to land a new flow of deals. She adds, “the combined brand is much stronger than one.”
“People who wouldn’t normally show up to me, a GP with a check for $250,000, would now show up to a group of VCs with the potential to get a (million dollar) check,” he said. she told TechCrunch. “It’s more efficient for the founders. “Why haven’t other smaller funds done this before?”
Bi’s comment track: While co-investing is common among early-stage venture capitalists due to the sheer size of checks and the popularity of seed rounds, efficiency is of importance constant among investors. Especially given how difficult solo GPs are in today’s risk-averse LP landscape, focusing on a group rather than individuals could help block out all the noise.
“I know a lot of investors who basically invest in the best of everything that hits their inbox, like the top 10% of deals that hit their inbox,” Shapiro said. Many, he says, do “not proactively” launch projects to attract offers to them, whether by building a Twitter following or posting Youtube videos, or in the case of solo GPs, investing. in a complete marketing device that helps them stand out. more entrepreneurs.
When Shapiro researched the 16 investors who would make up Seed Checks, he said he was able to convince them to join because of the appeal of combining their collective social audiences for better deal flow. “By putting our faces together, we were getting higher conversions from the founder submitting pitch decks and, admittedly, much better offers,” he said. Shapiro himself no longer directs people to his own website; it simply sends them to Seed Checks.
Another tool gaining traction is VC Sheet, built by Ali Rohde of Outset Capital and Shapiro. The duo created a website that publishes lists of investors based on their stage, location, or startup vertical. It’s like a more refined, easier-to-search Crunchbase, Rohde explained. The problem with all the tools that make it easier for investors to access is that it can be difficult to keep track of changing taste buds. In fact, TechCrunch once attempted to create a guide for active venture capitalists, dubbed The TechCrunch List. He is dead.
Rohde said VC Sheet is different from TechCrunch List in that it’s explicitly focused on providing startup market information; and instead of only offering proptech-focused investors, they opt for lists like New York’s Most Active Pre-seed Investors.
“For founders, it doesn’t make sense to have an in-depth, holistic view of the seed funding ecosystem because they’re going to walk through it once. So figure out who you need, move on, back to building,” she said. “Again and again and again, we’re in these calls, talking to founders, and they’re asking who they should be talking to — and so it makes sense to us to spend real time setting up this central repository – it’s not. makes sense for a founder to do that.
Venture capital sheet and seed checks are free for founders and investors; nor try to become businesses or charge for access. which could play a role in its success due to accessibility.
Shapiro says VC Sheet is trying to address a larger structural issue around founders’ ability to find an investor-startup fit, while Seed Checks is about getting in front of more than a dozen top-tier investors with priority and ease.
“Seed checks aren’t trying to be a giant solution to the VC ecosystem, they’re not being offered as a panacea,” he said. “It’s just another outlet for founders…a reflection of where fundraising could go for greater efficiency and access.”
If you have a juicy tip or a lead on happenings in the risk world, you can reach out to Natasha Mascarenhas on Twitter @nmasc_ or on Signal at +1 925 271 0912. Requests for anonymity will be respected.
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