Here at Bee Partners, we are constantly asked on what we focus our investment time.  As our firm evolves and matures, we’re ever more cognizant of our need to differentiate our offering and understand where the opportunity lies for us along the investment continuum.  Over the past year it has become clear to us that our focus isn’t on a specific what, but rather a who and when.   Translated, this means we look for thoughtful Founders with Deep Market Insights at the start of their entrepreneurial journey.  Or even more simply, pre-seed or genesis stage investing into people who can execute.

Formerly called FFFF rounds (Friends, Family, Founders, Fools), these pre-seed or genesis stage rounds are increasingly polished, organized, and professional.  They come with greater accountability, mutual respect, and performance expectations.  As such, we we’re clarifying our thinking about how we define this space as we speak with amazing entrepreneurs.

COMMON TRAITS OF PRE-SEED COMPANIES:

Size of Raise: Generally a round of capital between $250,000 – $750,000.  The company will efficiently use this resource to attract talent and continue to explore the idea around their deep market insight.  Burn rate is in line with capital raised.  

Pre-Product Market Fit:   There exists strong conviction around the table about the direction the company is headed, with a healthy understanding there is much to do.  We believe that if the Founder(s) navigate the waters confidently, the company will move and succeed in the bigger stream.  This usually starts in a niche, but rides the current into a larger, emerging, and/or expanding market.  We also know it will make a difference if they do find PM fit.

Emerging Team Dynamic:  The team is perhaps not formulated entirely, but there is clear Founder – Market fit.  The Founder(s) are cognizant of the importance of a strong team, and that early hires significantly shape the future of the company.  The Founder(s) have a loyalty to the problem and the grit to see the solution gain traction.  Must have technical co-Founder or equivalent.  Seeds of culture and governance.  

Ability to Tack:  Preparation begets the ability to execute when the game plan must be altered.  Often the top of the next mountain is just a bluff and the trail takes a surprising turn.  Founder(s) must accept that the greater it gets, the harder it becomes and display a willingness to move to the next fishing hole.  Founder(s) must confidently prospect and execute on the right opportunity at the right time.

Multi Focusing:  Founder(s) must make the sales and craft the strategic partnerships, while fundraising and managing their organization.  Technology leads must architect a system, manage a team, all while serving as initial product manager.  Early hiring is key.  Can’t lose sight of Big Rocks (those mission critical tasks that can’t be completed in the next cycle, but must always be pushed up the mountain).  

 

More to come on this topic I’m certain.  Reach out directly if you have comments, they are welcomed always.  We also warmly welcome introductions to Experienced Founders with a Deep Market Insight, predominantly around enterprise or enabling technologies or market network business models.  We lead pre-Seed and Seed rounds.

 

*interestingly, Rob Go, an investor from NextView whom I read by have never met, published this just last week while I was crafting this note.