20VC: Why Now Is The Hardest Time To Raise an Institutional Pre-Seed in the Last Decade, What To Do When The Founder and VC Interests Do Not Align & The Rise of Pre-Emptive Rounds with Gaurav Jain, Founder & Managing Partner @ Afore Capital
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 6 January 2020
⏱️ 39 minutes
🧾️ Download transcript
Summary
Gaurav Jain is Co-Founder & Managing Partner @ Afore Capital, one of the west coast's leading pre-seed funds with a $124M fund focused purely on pre-seed. To date, they have backed the likes of Petal, BetterUp, BenchSci and Modern Health to name a few. Prior to co-founding Afore, Gaurav was a Principal @ Founder Collective where he was directly involved with some incredible companies including Cruise (Acq. by General Motors for $1B+), Periscope (acq. by Twitter), Airtable and Dia & Co. Before venture, Gaurav spent time in operations both at Google as one of the first engineers for Android and then also founding his own company, Polar, a leading mobile solutions provider with $10m in funding.
In Today’s Episode You Will Learn:
1.) How Gaurav made his way into the world of venture with Founder Collective and how that led to the realisation that Afore needed to exist in the funding landscape? What were the 3 biggest takeaways for Gaurav from his time at Founder Collective?
2.) Why does Gaurav believe now is the hardest time in the last decade to raise your first institutional round of funding? What is driving these capital reductions at pre-seed? How does Gaurav assess the rise of operator funds and super angels we have seen in the last 5 years? How does Gaurav advise founders on investor selection at pre-seed?
3.) What does Gaurav make of large multi-stage funds entering into pre-seed? Why does Gaurav strongly believe that you cannot apply the same financing product to a different market? Does this mean the multi-stage funds will revert back to later stages?
4.) How is Gaurav seeing Series A funds behaving? Why are they more aggressive now than ever before? What does Gaurav make of the rise of pre-emptive rounds? How does he advise founders on pre-emptive rounds?
5.) How does Gaurav think about portfolio construction today with Afore? What is the right level of diversification across the portfolio to be sufficiently diversified at pre-seed? How does Gaurav think about reserve allocation today? How does the decision-making process compare when comparing initial to re-investment decision?
Items Mentioned In Today’s Show:
Gaurav’s Fave Book: Trillion-Dollar Coach: The Leadership Handbook of Silicon Valley’s Bill Campbell
Gaurav’s Most Recent Investment: Modern Health
As always you can follow Harry, The Twenty Minute VC and Gaurav on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Transcript
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| 0:00.0 | We are back for the very first 20 VC of 2020 and I'm so excited so in the coming months we have the lisa Vinot, Kossler, Patrick Collison and Howard Marks coming on the show. |
| 0:08.7 | Such exciting times ahead. But I've been reflecting on what we did well and maybe not so well in 2019. |
| 0:14.0 | And I don't think we covered pre-seed well enough last year. That's going to change in 2020, and that's starting today. And so with that, I'm thrilled to welcome Gurav Jain, co-found and managing partner at a Four Capital, |
| 0:24.1 | one of the West Coast's leading pre-seed funds, with a $124 million fund focused purely on pre-seed. |
| 0:30.5 | And prior to co-founding a four, Gurav was a principal at Founder Collective, |
| 0:33.7 | where he was directly involved with some incredible companies including crews acquired by |
| 0:37.7 | General Motors for a billion dollars periscope acquired by Twitter air table and deer and co |
| 0:42.9 | and before venture gerav spent time in operations both at google and then also founding his own |
| 0:47.3 | company polar a leading mobile solutions provider with 10 million dollars in funding but before we |
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