Today marks the 10-year anniversary of Version One. What started with one small fund ($18m) and a solo general partner has developed into a real fund franchise with two GPs, six funds (four core, two opportunity), over $250m in assets under management, and 80+ investments around the world.
We feel endless gratitude for reaching this milestone and for everyone who has contributed to the journey. Looking back at these ten years, several lessons stand out. Some were figured out quickly, and others we had to learn the hard way. Here are the most impactful things we’ve learned:
- Early stage investing creates the best outcomes if you’re investing in non-obvious opportunities in markets that are early on their S-curve. We like to say that if a category is “branded,” we’re probably too late. For example, once everyone talks about the sharing economy, you’ve probably missed Airbnb. Or, if you have a good sense about how “the movie will play out,” there is probably not much optionality in a business (outliers rarely get created in a straightforward execution play).
When we started V1 in 2012, our focus was mainly on SaaS and marketplaces. Since then, we have jumped into many categories that were early on the S-curve at the time: healthcare/bio (2014), crypto/Web3 (2016), robotics (2019), climate/energy (2020) and VR/AR (2022) to name a few.
- When you invest as early as we do, it always comes down to the founders. Some of the biggest success stories have been pivots where the entrepreneurs created a completely new opportunity out of nothing. On the flipside, we never had much success when we had more conviction about the business than the founders. That realization led us to simplify our investment thesis to “backing mission-driven founders at the earliest stages”.
- As a VC, your impact on the success of a business is limited. 99.99% of the magic is created by founders and their teams. An investor’s biggest impact comes when he/she believes in a team when no one else does and commits capital when nobody else does. Be the first cheque, lead a round, help with a bridge. But of course, you must do it all with conviction. Founders need a true and long-term partner, not just a cheerleader.
- Early-stage investing is more art than science and hence, hard to scale. Investing in “weird” opportunities is hard to do in a large partnership and is better done in a small, very aligned one.
Ten years of early-stage investing brings amazing clarity about what matters: the founders, finding non-obvious opportunities, being early in a large market, having conviction, and being long-term partners to founders. While this clarity helps guide us today, early-stage investing is still very, very hard. But we wouldn’t want it any other way.