Welcome to AfterWork Reading, where we lift the lid on VC with unfiltered investment notes, founder resources and industry hot takes!
What we’ve learned as first time fund managers
18 months ago - three of us (Adrian, Alex, and Jessy) left stable, well-paying jobs in finance, management consulting, and corporate venture capital respectively to go all-in on building AfterWork Ventures - a community-powered venture capital fund that invests in pre-seed and seed stage companies.
When we tell this story retrospectively, it may seem like we’ve known what to do each and every step of the way. But - as many founders know - best-laid plans often go awry. More often than not, we’re improvising and iterating as we go along. We’re honoured today to have been named in The Australian’s Innovator’s List, alongside many founders, builders, and creatives we admire.
But just as a glossy picture may speak a thousand words (e.g. buy Tiffany); there’s also a lot they gloss over. So, we thought we’d take this occasion to transparently share what we’ve learned as we’ve set off on the journey of raising our first fund.
1. A good process > any individual wins
As we embarked on raising a fund, we quickly realised how much being a fund manager has in common with being a sales manager. Both when fundraising and when making investments, you:
- Generate interest in your product using brand and content marketing
- Build your pipeline of prospects
- Qualify said prospects - not everyone is right for you, it’s important to understand what your customers are trying to achieve
- Build your prospective customers’ conviction that your product will add value to their lives
- Overcome any key objections
- Help your customers succeed
Like good sales managers know, there is never a silver bullet. Success is won through consistently filling the pipeline with leads, running a disciplined process, and turning up every day - ready to smile, listen, and answer questions until your face aches.Often in startups and in venture capital, we see singular moments being celebrated - like a brilliant investment decision, or bringing onboard a cornerstone investor. In the last 18 months, we learned that the process is far more important than any individual win.
2. Screw conventional wisdoms - there’s room to do things differently
Before we launched our fundraise, we sought guidance from people who’d ostensibly done what we’d done before. We received a lot of well-intentioned advice:
- You’re not sufficiently credentialed; you should bring onboard grey-haired advisors
- You don’t have any networks; you should use a placement agent
- You don’t know how to navigate the press; you should use a PR agency
- Investment in brand and content doesn’t move the needle; it’s all about the networks you already have
We tried to take onboard some of this advice, until we started realising that there isn’t one right way to do venture capital. Instead of trying to obfuscate our perceived shortcomings with advisors and placement agents, we leaned into these points of difference and turned them into strengths. For example, although we were raising our first professional fund, when we were investing out of our proof-of-concept microfund, we took investment decisions incredibly seriously - and performed due diligence as if we were investing much larger sums of money. We decided to showcase the consideration that had gone into each investment decision by publishing detailed investment notes - that explored not only why we loved the opportunity, but the challenges we saw, and questions we had for the team. You can find our entire repository of investment notes here.
In addition, although we didn’t have ‘ins’ with high-net-wealths and family offices, we were amazed by the generosity and conviction shown by our community members. They rolled up their sleeves and made our slog their own. Not only did they pitch in hard-earned salaries to collectively anchor our fundraise, they reached deep into their networks, called in personal favours, and penned soaring introductions to put us in front of the operators, high net worths, and family offices we needed to convince to believe, and invest, in us. Read more our community-powered fundraise here. Lastly, there was not a chance we could afford a PR agency. So Jessy slid into an AFR journalist’s Instagram DMs, invited her to grab lunch, and pitched the AfterWork story with sufficient enthusiasm to pique the reporter’s interest. The rest is history.
3. The more we give, the more there is
In the early days, we brought our community together to jam on our community values. Since our inception, a spirit of generosity has been the heartbeat of AfterWork Ventures; and our value ‘the more we give, the more there is’ sums up this sentiment beautifully. It’s a guidepost and fundamental to who we are and how we show up.
As we progressed, we quickly realised the world is run by people who show up. As a community, we showed up on Sunday evenings to discuss investment opportunities. As a brand, we showed up with the content we created - from Fresh Fundamentals for founders to content that lifts the lid on how venture capitalists think about investments.
As a team, we wake up every day and try our hardest to show up for founders - both the ones we’ve invested in, and the ones we’re meeting for the first time. We were delighted when in return, the founders we’d supported showed up for us as well. More than ten founders in our portfolio have turned around and invested in our fund, and become incredible members of our community - hosting masterclasses, sharing learnings, pitching in to help other companies, and helping us to understand new investment opportunities.
We’re humbled by this flywheel of goodwill we’ve kick-started - and promise to keep turning up for as long as we can.
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