Fred Destin Profile picture
18 Oct, 15 tweets, 5 min read
1/ Let me distill the Stride investment strategy in fifteen tweets. Yes, fifteen 😘.
2/ To be able to make money, you need some form of edge. The edge does not need to be complex of over-intellectualised, but it needs to be real and drive returns.
3/ Some funds are vertical specialists (say @anthemis ), some leverage network assets (say @ycombinator ) or build large portfolios (say @seedcamp), some funds leverage dominant execution capability (say @sequoia or @IndexVentures ) etc.
4/ We focus on what we know well - "dealing with ambiguity" (TM).

By that, I mean the absence or scarcity of data and the lack of definition around the key elements of a scalable business (could be product, pricing model, GTM, team related etc)
5/ We fit in a zone where teams have gathered customer insights and have developed product, but a lot remains undefined. They are typically at a fragile state where they have started to ramp but don’t tick the boxes that would allow them to raise Series A from mainstream funds.
6/ It’s a time in a company’s life where as an investor you need good people judgement, the ability to assess what projects have unlimited upside ... but also a fair amount of creativity and out-of-the-box thinking to imagine what can be. We thrive on that.
7/ In an effort to focus and get to the best founders early enough, we decided to geo-fence ourselves to the UK and France. We offer very clear market exposure to our LPs in this way. This strategy is under constant review, especially in a COVID world.
8/ Whilst we spend time thinking about “The Future” and macro trends, we are anti-thematic as we find founders are so much better at finding white space than we are. Most of our best investments don’t fit an obvious theme. We try to be “mentally plastic”.
9/ We only invest in things we fundamentally like, not just stuff that makes money. Hence we much prefer strong mission-driven companies … but we’re not techno-utopians (look where that got us... ) and try to stay very humble on that front.
10/ Being a slightly larger seed fund (£100M) allows us to write meaningful checks when it matters.
11/ We like this insertion point because (a) valuations are reasonable (b) time to market is typically short (c) if we and our founders do our job well, this is a point of strong valuation inflection in a company’s life.
12/ We work hard on “getting picked”. We engage deeply with our founders on product and strategy in a way that they can relate to, and we leverage the incredible network assets that @harrystebbings has built to construct strong syndicates or connect our founders with the best.
13/ We also work hard with our founders to build relationships of trust, grounded in a pragmatic, jargon-free assessment of reality, whilst removing much of the control / power dynamics you see at play on so many boards.

Earn your seat at the table. Impact vs overhead.
14/ If we do this consistently and take enough risk, we should be able to construct high performance portfolios whilst keeping our founders happy. We’re not a factory but a craft shop for that reason. We don’t want to scale.
15/ It’s all very old school but it seems to work. We look to the likes of @benchmark, @iaventures, @foundrygroup, @fcollective as successful examples of similar approaches.

That's it!

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Fred Destin

Fred Destin Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @fdestin

24 Sep
1/ A CEO’s number one job is to define the mission, communicate that mission relentlessly, and keep everyone focused on the mission.

That’s how you move the ball down the field everyday.
2/ That communication is to team members, clients, partners, investors, the market at large.

It’s got to be simple, consistent, and consistently repeatable by others. Your second layer SDR needs to be able to deliver almost as well as you do.
3/ this is why founder / CEOs can’t spend their entire time doing.

Systems, processes, culture and people must align to collectively help define the right mission, amplify it and execute it.
Read 6 tweets
2 Sep
How to get your hands on pre-seed funding 👇
1/ First principle - THE PICK.

Make sure you’ve picked your idea well!

A problem you feel is really worth solving, or an opportunity you’re willing to commit a good chunk of your life to. Validate hard before you commit.

Fact: Too many founders rush into average ideas.
2/ Find a co-founder

It’s harder to get funded solo. It's also lonely.

Whether you can attract one more person is a first, important point of validation. Trustmark #1.
Read 14 tweets
26 Aug
1/ Your startup valuation, explained simply 👇
2/ Angels and Investors will buy newly issued shares (US: stock) in your company.

They will invest a dollar amount (say $1M) and buy shares at a certain Price Per Share (PPS) which is the value of one unit of equity (a share).

So far so trivial :-)
3/ Investors look at your existing business, assign a value to it. This the Pre-Money Valuation.

Post Money = Pre-Money + New Cash coming in
= the agreed value of your company + the cash that sits in your bank account immediately after the round.
Read 24 tweets
25 Aug
1/ How VC economics work explained very simply 👇
2/ Management company is the key entity. It is owned by the General Partners.

Revenues are fees paid on funds (usually 2%, may go down after investment period).

Expenses are team comp, office, all ops, compliance and placement agent fees if those are used.
3/ Each fund is a separate Limited Partnership. Investors are hence Limited Partners.

Each fund pay fees and carry ... as well as some expenses (legal feels, deal expenses, fund admin, audit fees)
Read 7 tweets
1 Aug
1/ Here are a few things I do to contribute to keeping Twitter a decent & fun place to be. Call it grassroots moderation :-)
2/ Your thread = your home, your rules.

Remind anyone engaged in labelling, name calling, bad faith that they're here to have a grown-up discussion. Or they can go tweet elsewhere.

Shut down any conversation that involves hate and abuse, delete the original tweet if necessary.
3/ Assume good intent.

Twitter shouldn't be a contest for always penning perfect tweets; sometimes people use the wrong words.

Remember you won't convince anyone by shouting at them 😂
Read 5 tweets
31 Jul
1/ Founders - should you be adding VC investors to your regular email updates? My recommendation is no.
2/ Say your typical VC receives 50-100 "actionable" emails per day and they take 10 seconds to 5 minutes to process, or 2 minutes on average.

A prioritising mind will hit delete without reading.
3/ In the meantime your regular updates, whilst super interesting to your *actual* investors, might be pretty mundane. Team hires, product improvements, the month to month of building your company.
Read 6 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!