Investment club of a new type

90% of investments at Pre-seed and early Seed stages are provided by business angels. Let’s be honest, financing early-stage startups for an investor is both a possibility to multiply their investments and a high risk: chances to receive the return of investments are 1 to 10 at best.

I won’t say anything new If I state that angel syndicates help business angels (with the average paycheck of $10–50 thousand) to join forces to diversify the investment risks, enlarge the investment portfolio and for cross-sectional mentor help for startups. There are thousands of syndicates around the world, which are formed on the geographical principle, investment sum, stage, industry and God knows what else.

Early-stage investment market today is an annual world turnover of more than $20 billion with constant growth (not taking into account the pandemic period). However, despite positive dynamics, not everyone manages to get ROI 8–10X. So what is “luck” all about?

This is how the standard workflow looks like when an investor selects a startup at Pre-seed — Seed stages:

1. Denial; 

2. Anger;

3. Bargaining;

4. Depression;

5. Acceptance.

Alright, now for real:

1. Search; 

2. Pitch deck preview;

3. Pitch and presentation;

4. Communication;

5. Request for startup’s top-secret financial documents;

6. Understanding and accepting the fact that the choice was a complete shot in the dark (well, almost in the dark);

7. Legal;

8. And finally, investments!

All these stages take months of work, and quite often there is a lack of expertise, time and resources to complete all the stages all alone. That is why angels prefer to join angel networks (BANs), where most of the work is already done or can be done for them. Strength in unity. But innovation is the progress engine, isn’t it? Therefore, we decided to take a new approach to the issue of business angels’ joint investments.

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Let's talk about investclub.vc

investclub.vc is about smart investments in early-stage startups. Our goal is to fish out all promising projects from “the death valley” and boost them straight to Series A with the help of business angels club.

Startups

Startups from Eastern Europe are mainly in our focus. Everybody knows that the valuation of identical companies in Belarus and in the US will differ by 5 times, and this is already a huge advantage for a venture investor. In addition, the technical minds of Eastern Europe are at a premium in the whole world.

Model

BANs are great not only at a screening level (as you know, not every businessman who calls himself an investor, can become a member of the network) but as an educational environment for angels. We adopted this practice for ivestclub.vc.

We define 2 roles in the Club: “Lead-investor” and “Investor”. Lead-investor is an experienced venture investor who has strong expertise and led in a few deals. Investor is an angel, who’s not experienced enough to lead the deals but wants to learn how to do it from the professionals and participate in the fundraising process under the guidance of the Lead-investor.

Innovation

Let’s get back to “luck” and goals of every investor to get ROI 8–10X. The whole thing is hidden in the preparational process which is done by us, as you might have alredy got an idea of.

1. Startup search

Well actually, the search for the ambitious founder with a strong background who creates venture history not just another coffee shop. To achieve this, we have a growing startup database in our ecosystem — an online platform named rocketdao.io. Large networking and numerous activities provided by our team, play a major role here as we have already branded ourselves on the CIS startup market with the help of the Startup Training Camp acceleration program; startups approach us for help.

2. Team evaluation 

We conduct a comprehensive startup selection, personal meetings and interviews are compulsory. In such a way we “fish out” strong teams, which are encouraged to work 5–10 years on a company and won’t burn out or go nuts.

3. Traction

Having consulted with venture funds and serial startuppers, we defined the most important metrics for monthly startup traction. It is an awesome tool for a) mentoring startups and helping them to define the growth points: financial, strategic and product ones; b) “weeding-out” projects which are obviously unprepared to grow; c) a convenient and illustrative studying of the dynamics of startup development — these are the signals for an investor whether it’s time to pay attention and start negotiating with the team or wait for a while beofre making a soft-commitment.

4. Evaluation

The majority of BANs are lacking a complex expert startup evaluation. In our case, we have decided to provide the right to evaluate startups to analysts and partners of the venture funds; such a decision is clearly explicable — funds are the main startup investors at the late stages, which are following the angel stage. The evaluation is done by our in-house methodologies for the vital metrics: product, business model, market and team. There are many articles about how we do the evaluation, by clicking on the link you can find more information about our approache and examples.

5. Mentoring

It is done through traction, mentoring sessions with experts, educational content on our social media Startup Jedi, personal consultations and tracking. We are the ones who are responsible for preparing startups for fundraising.

6. Syndication

In our system, only the startups that have passed expert evaluation and regularly show honest traction can announce the start of the fundraising process. After that, the procedure is quite simple: we select the list of investors who are interested in the startup, create a private deal-room with founders — and then lead-investors do their magic!

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It works 

In Rocket DAO it’s not once that we have tested this model and we can show off with a few successful cases. Recently, Caer Sidi, the winner of our first Startup Training Camp (and the forst startup to go thorugh the whole ecosystem within Rocket DAO), attracted investments. It is a cross-real ecosystem which combines online-games’ mechanics with offline objects. How the team has attracted investors and its future plans — all and more in our article. Coming soon press-releases about successful deals of GamePad startup (a game store in Telegram with a wide range of games in different genres) and Easy Bloggers (a full cycle influence-marketing platform, which automatizes the work with opinion shapers).

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Got interested?

To become a member of investclub.vc and value the effectiveness of our approach of managing the investment community  or to ask any question— visit our website http://investclub.vc . We will contect you. We mean it.

For efficiency, you can directly contact the Club manager (me, the author of the article) by mail: yo@investclub.vc, or, it’s even better, in Telegram — @annmast.

No pasaran! Venture to all.