Incubated by a VC

Today I only had one meeting and quite frankly, I was pretty happy - had to do plenty of other useless stuff like go to the post office and send books and materials as well as gifts (especially for Max) to Prague (pretty expensive thing here), get a haircut, meet one of my partners in Credo Ventures who came for a conference in SF, et cetera...

But the meeting which for the last time brought me to the Sandhill Rd turned out to be a very interesting one... I met Susan Mason, General Partner with ONSET Ventures, one of the older VC firms in the Valley with over $ 1b under management and over 100 companies backed since 1984... Their motto is helping transform great ideas into successful business, and that means they try to work with the entrepreneurs even before they start the companies - and actually, one of the modes they are used to operate in (and actually do about 6 - 7 deals like that per year) is so called pre-seed... If they like the idea, but there is no business plan, or business model picked, or management team in place, they can offer simply a loan up till $ 750k, invite the team in their offices ("ONSET Incubator") and make the assignment to work with the team to verify the product / technology, finalise business plan or even line up executives to complete the management team... If everything works well and the team delivers what needs to be delivered by the time they promise to deliver it, ONSET converts the loan into equity and makes additional investment, even finds a co-investment partner... Very interesting and inspiring model, definitely worth thinking about...

What I also liked about ONSET was that they always aim to co-invest, invest in consortiums... In their view it's not about competition or having all the future profits for themselves, but about having more parties involved and more smart people at the table... Absolutely agreed...

Finally, a bit of numbers for today - Susan mentioned that ONSET receives about 4,200 business plans every year, out of which about 300 teams are invited to talk to ONSET, out of which about 6 or 7 they decide to invest in... Definitely a totally different world... In the Czech Republic I get probably 300 emails / exec summaries every year, but only like 1 of 10 makes it into a "business plan stage"... So I have to be looking for the suitable companies myself and convincing them to start thinking big and expand with external financing... Probably funny for Sandhill Rd VCs...