To Traditional VC or not...?
We didn’t start this thing to hate on the existence of traditional Venture Capital — we’ve raised lots of Venture Capital for our previous companies, we are Limited Partners (investors) in traditional Venture Capital funds, many impactful innovations and wonderful companies exist in no small part because of traditional Venture Capital… but implicit in the fact that it is a great fit for some companies is the fact that it is not a fit for many others.
Traditional Venture Capital is designed for companies:
1. Taking on big, complicated, novel technical challenges
If you're building spaceships, driverless trucks, supersonic jets, dancing robots, platforms to cure disease, etc… good on you.
You are building some cool shit, which will have profound impact on our world… and you are going to need to invest a lot of money working through exceptionally difficult technical problems.
2. Competing in huge winner-take-all markets with big network effects
Especially where it helps to delay monetization in favor of audience building. Facebook, Twitter, Slack, Uber, Doordash, Instacart and many other exceptionally successful companies immediately come to mind.
No shame in the game here either — the rewards of winning when building this type of business are huge.
3. Committed to racing to build billions of dollars in shareholder value… or bust
Misalignment
The investing strategies of traditional VC funds are built around the reality that the returns they earn from their investments will be heavily driven by the very, very small percentage of exceptionally valuable companies. This is great if the company you want to build fits nicely into one or more of the three types outlined above… however, if it doesn’t, we think the resulting misalignment is less than ideal for the founders, their teams, and ultimately their customers.
Build the company you want to build
Our motivation for building Sodality Ventures is to offer you a high quality alternative option — one which attempts to positively address the elements which draw you to traditional Venture Capital, but which is designed intentionally to align with the type of company you want to build.
© 2021 Sodality Ventures
