TLDR: Founders need more money, LP’s need investors to be more selective, and the world needs more startups.
After 9 years working at LinkedIn and 15 years being a member, I finally had a post go viral
This isn’t the first time I’ve posted this exact same thing, so as far as I’m concerned the secret to going viral is luck.
I assume it was some combination of brevity, call to action, performance within the first few minutes of posting, and the fact that my audience had recently become more geared toward venture capital due to a series of popular (and not quite viral) posts. Together, aside from luck, I imagine that’s what created a perfect storm that allowed over 4,200 people to comment and nearly 800,000 to see it.
And as great as this post was for visibility, and as uplifting as it was to see just how many bright and ambitious people are out there building, the truth is, triaging a viral post like that is just wildly time-consuming.
Not only were there 4,200 comments to parse through (which we did with AI), but 4,000 connection requests, 100’s of InMails, a handful of random text messages and WhatsApp phone calls, and a whole bunch of subsequent knock-on effects like follow-up posts and mentions. Getting to all of them is just going to take some time.
And unfortunately, the sad truth in (the rest of) venture is that inbound deal flow almost never creates any value. Keyword “almost.” Most all deal flow never creates any real value.
But the reason inbound is particularly difficult is because when you really get down to it, VC is still an insiders’ game with anointed winners and deals that get done by way of relationship.
You can’t blame the VC’s. Who wants to invest in a team that is incapable of raising on their own? Emotionally, you want to be part of the deals with momentum, the ones that are hot. If founders don’t even have the network for a warm introduction, how are they going to find customers, or get subsequent funding?
And while that’s true, it’s also true that those facts have next to nothing to do at all with the quality of the founders and their ability to execute. It’s simply one sign, particularly at early-stage that helps an investor underwrite some small level of risk reduction.
I mean, just look at the post—there are only 20,000 founders in the US, and yet there are 4,000+ people in one single thread looking for capital at the earliest stages.
Supply and demand is broken. Underwriting at the earliest stages is broken.
And with venture capital-backed companies accounting for 41% of total US market capitalization and 62% of US public companies' R&D spending, we need to continue supporting companies at the earliest stages to fill the pipeline of long-term economic value creation.
Talent is distributed evenly, but capital is not.
I heard a fact last month from a YC insider that was something to the effect of “If YC never did a deal from its inbound channels, there would be no meaningful difference in fund performance.”
I don’t have the specific data to back that up, but it wouldn’t surprise me. At this point, with YC’s popularity and success, if you’re a founder, and you don’t know a single person or can’t get introduced to anyone who you can list as a reference or referral on your YC application, it’s probably somewhat of a signal that it’s going to be difficult to raise and recruit world-class talent too. Networks are exponents on execution, and lack thereof is an additional layer of risk.
But that’s exactly why we need something like Antler in the world.
All of these talented people, where culture and execution eat strategy and ideas for breakfast, deserve a chance to change the world. They deserve a shot at a friends & family round, committed on the basis of pure talent, determination, and results.
That’s the beauty of admitting 3% of founders to Antler’s residency and investing in 10% of them—the result is an absolutely elite 0.3% investment rate where we’re both an order of magnitude more selective than Harvard admissions (3.9%), and yet we can cast a net 3X wider than other firms who typically invest in 0.5% - 1% up front. This is all made possible by the two layers of investments decisions; first is admissions to our residency program, and second is our investment committee. In other words, we can do all of this because we work with founders in-person before we make a final investment decision.
Running this playbook is not only amazing for LP’s give the asymmetric execution information we get, but it gives tens of thousands more founders an opportunity to realize their potential and change the world. That in itself is badly needed in this world, but investing with more selectively into those who out-execute others and who will be good stewards of the capital is too.
“But that’s why the accelerators exist, isn’t it?”
No.
Companies that join accelerators are, on average, 16 months old.
Companies that receive funding at Antler are, on average, 8 weeks old.
Accelerators historically provide 100K-150K, and now up to 500K - $1m in the case of YC, Afore, Sequoia, and a16z—with the latter funds running much smaller cohorts.
Antler US falls into the latter bucket, writing $500K. But we do it at day zero.
Having $500K within two months of starting your company is a wildly different time to value and trajectory for founders than 16 months of building alone, then raising a small amount of money in order to get to a demo day that then still leaves you where most founders in the market are right now: not enough traction to get money, and not enough money to get traction.
Those companies are dying.
But companies with $500K-$1m are going to gain market share in a down economy and come through this period stronger than their peers.
That, ultimately, is why I think that post went viral. Because what we do at Antler is badly needed in the world. A solution to day zero. A product for founders that actually sets them up for success, and a product for LP’s that actually underwrites execution and bets the jockey not the horse.
I’m hosting an AMA on Wednesday to share more. If you want to join, sign up here.
Or if you want to help founders in your network get a shot at $500K to kickstart their ideas, you can just share this post with the button below.
See you Monday.
I'm going to comment here since your linkedin post is crowded ;) Here you go - "stealth".
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