How to Build Your Fund’s Investment Thesis
A critical component of establishing your fund’s differentiating investment thesis is how you articulate and execute your vision and strategy. Your vision is your desired outcome, and your strategy is the collection of resources used to reach the desired outcome. Vision and strategy share an iterative and mutually beneficial relationship: the more you clarify your intended outcome, the more apparent your resources become. By continually refining your vision and strategy, you greatly increase your likelihood of success along your journey toward launching a fund.
Your investment thesis should give your investors a sense of your investing philosophy, expected portfolio composition, and what gives you a competitive advantage that other funds do not have.
Step 1: Review the following exercise to create your own investment thesis.
Exercise: Investment Thesis
We invest in <type of founder or company>,
by doing <your competitive advantage: how you understand, access, own more of them>,
which results in <benefit to performance>.
Step 2: Review the following examples to learn from fund managers like yourself about how they model their investment theses.
Example A: Investment Thesis — Greenery Ventures
Greenery Ventures supports pioneers of the new Sustainability Era,
by accessing proprietary scientific research and testing,
giving us early insights and outsized long-term performance.Example B: Investment Thesis — 1517 Fund¹
1517 Fund invests in brilliant young Founders without a college degree by offering a $250k check and mentorship when they are going into pilots, which results in the startups finding product-market fit before their seed round and in us becoming the first phone call of any young person starting a company and makes for great economics as the first institutional investor in the deal.
Example C: Investment Thesis — Grit Ventures²
Grit Ventures invests in early-stage AI and robotics startups, providing go-to-market expertise to significantly de-risk early-stage hardware investing, which results in a conviction portfolio of Robotics as a Service companies that are able to scale more quickly for less capital.
Example D: Investment Thesis — Resolute Ventures³
Resolute Ventures invests in Founders at the very beginning of their journey. We are not category- or sector-specific and tend to focus our due diligence on getting to really know the founding team by investing in what today would be considered the angel round but with a full seed check. We are able to lead our investments and partner with Founders as early as possible, which results in us being aligned with our Founders as they scale up their companies.
—
Sincerest appreciation to the following individuals for their invaluable contributions:
[1] Danielle Strachman, 1517 Fund, personal interview. Michael Gibson, 1517 Fund, personal interview.
[2] Jennifer Gill-Roberts, Grit Ventures, personal interview.
[3] Raanan Bar-Cohen, Resolute Ventures, personal interview.
—
By Shea Tate-Di Donna and Kaego Ogbechie Rust, authors of The Venture Fund Blueprint.
To see more like this, buy The Venture Fund Blueprint book on Amazon, sign up for our newsletter, engage us to collaborate with your organization, and follow us on social media.
—
Disclaimer: The providers, companies, examples, products, and services shared represent only a subset of available options and are based solely on internal fund manager conversations. These options are intended to be a general framework, not an exhaustive catalog, and should not be viewed as legal or tax advice, endorsements, recommendations, approvals, or rankings. We encourage you to do additional research into each category to find the resources that best fit your specific needs.
