Seeding Future Growth as a VC

Aviad is well-immersed in the world of consulting. It’s a career he spent many years doing, before becoming Principal of the Investment Team at StageOne Ventures, an Israeli venture capital firm. There was natural progression from consulting for Aviad, as he had previously spent roughly a decade at Accenture, having been bitten by the bug of venture investing.

These experiences all gave Aviad some great insights into analysing up and coming start-ups, and in a recent episode of Tech Salescraft, he shared his observations with James Hounslow.

Support in stormy weather

There have been many highs and lows for start-ups since the pandemic. Credit was easy and there seemed to be a unicorn a day being declared during the height of the post-COVID boom in 2021. However, this gave way to inflation, tighter credit conditions and the funding which had been so freely given now came much harder to find.

Aviad says many investors are understandably cautious about investing in something new, especially if a start-up is proposing a new, untried, untested solution. Start-ups are having to make adjustments and plan for resistance when going out to seek funding. The likes of StageOne Ventures are some of the most top-of-their-game VCs in Israel, assessing the next big growth opportunity, offering haven and funds during a stormy period economically.

Picking the right fund

For later-stage, more mature businesses, Aviad observes how they are sales powerhouses. At the early-stage end of the spectrum, Aviad believes founders should be careful in choosing the right fund to approach. It means picking the fund which invests in your geography and the type of solution you’re selling.

Maybe it could be a generalist fund, like StageOne Ventures, or specialised in cybersecurity or DevOps. Picking the right fund is crucial, according to Aviad, because once a new fund is raised, investment is made over three to four years, and then a new round of funding will be required. If a fund reaches its fourth year and hasn’t raised a new fund, for example, it might be a sign that they might not be suitable, as they lack the cashflow to invest right now.

Evaluation of founders and teams

Any VC worth their salt will know the importance of due diligence, and evaluate a founder and their team thoroughly to be sure they are making a wise investment. Aviad’s modus operandi is to see if there is chemistry at first sight. This isn’t essential, but certainly helps, if the people he’s talking to are contacts for the next decade. Aviad considers the importance of relevant connections in an ecosystem, who might know potential investments.

Aviad uses these networks to establish whether they check out among the people he knows best, and even potentially past investors. The potential for a business to grow is a major consideration during evaluation, and Aviad often asks managers this question. Managers are singled out for this topic, as Aviad believes any manager should always look at employees and view them in terms of their individual potential, perhaps even to follow in their steps and replace them one day.

Want to learn more about James and David’s conversation?

Watch the full episode of Tech Salescraft on YouTube, or across all major podcast streaming platforms.