Dealing with some investors can be a hassle. Not with us. Here are some common questions we're often asked.
What’s your process like? How do you make a decision?
Our process is pretty straightforward:
- Introductory meeting – The objective of this meeting is to have a conversation about your business and explore how we can work together. If we met you through an accelerator, we will share feedback on your presentation.
- Screening interviews or meeting – We ask companies to deliver a 8- to 10-minute presentation followed by 5 minute Q&A.
- Member meeting – Varkain will hand select members or associates we feel are qualified to assess the company. Each company will have an opportunity to pitch members individuvally or, in some cases, as a group.
- Due Diligence – We target to complete due diligence and provide an investment decision within 6 weeks, but have been known to pull the trigger sooner.
We make hard decisions after
How does Varkain source deals or get deal-flow?
We work with numerous accelerators and university incubators who regularly expose us to quality deal-flow. We also actively search for deals across a number of channels, even scouring Kickstarter to find companies like UpCart. We also take referrals from our partner companies seriously.
At what stage should a company be operating when contacting Varkain?
We typically prefer to see companies with a working MVP and some level of traction before taking a meeting or considering a Seed investment. However, under special circumstances, we will take meetings and fund ideas during the concept stage. Companies in university incubators are typically referred or vetted through a pitch review.
If I’ve already raised some money from angels — is it too late to talk to you?
We don’t see a tangible difference between angel, seed and pre-seed investment. We’ve done all three and our behavior as investors has always been the same — very supportive. Founders’ needs are the same early on and most of the companies we invest in are made up of a couple of people wearing many hats. So, even if you don’t think you’re ready, we are big fans of entrepreneurship and always like to get to know inspired founders.
Do you actively work with any accelerators?
We are not LPs with any accelerators, but we have made investments in numerous companies via accelerators. Our closest relationship is with Quake Capital based in New York.
What documentation would you like to see to start the conversation?
We request either an executive summary or a pitch deck, preferably in PDF format.
Can we speak to the companies you’ve invested in?
If we execute NDAs and are actively in due diligence, absolutely.
How We Think
What’s your typical response times to deals you are considering?
We believe timely feedback is imperative for startups. If we like your business and deal, we will let you know soon. If we don’t like your deal, we will also communicate that to you along with a brief explanation of why we are passing. We know that time is critical to any startup and we respect that.
What sort of deals does Varkain consider?
We typically look at deal-flow in SaaS, mobile technology and hardware technology. We also tend to fund deals in seed and early series A, but have followed on in subsequent rounds with numerous companies.
How active is Varkain with it’s partner companies?
Very active, but we try to stay out of our companies’ way. We always offer to help or advise but do not demand it. However, we try not to invest in companies that are not willing to collaborate when struggling.
Does Varkain assist with pitch/presentations?
Almost always. It is rare that we would not expect a company to share their pitch and rehearse their pitch with us prior to raising in later rounds.
Can Varkain help me with my fund-raising?
Yes. Besides the fact that we may follow on in your next round, we always try to help our partner companies raise money from a trusted network that we feel could be an asset to the companies we back.
How do you judge your success as an investor?
While an answer based on ROI like 2.5x or 10x is typically how startups expect us to answer, we typically won’t know for 3-5 years if everything goes smooth. The truth is we may not know how a company succeeds for 5-10 years, so we initially base our investment success by companies that are sustainable, successfully disrupting their industry, and how the company and Varkain have grown as partners.
What is a typical investment for Varkain?
Depending on the stage of a business or our affinity to an offering, we have invested as little as $25K and as much as $700K as an initial investment.
Which round does Varkain like to participate?
We like to participate as angel or seed investors, but are not opposed to later rounds.
I’m raising my Series B or Series C — should I contact you?
Probably not. While we know people who are active Series B or C investors, we are early stage investors.
Does Varkain follow-on in later rounds?
Yes, we regularly follow on with our partner companies when we are seeing proper execution of the business with the right metrics.
Who else do you co-invest with?
We typically invest with other high net worth individuals either in the Palm Beach Investment Research Group (PBIRG) or funds/accelerators like High Street Partners, Quake Capital, Boomstartup and Kickstart Seed Fund.
When do you expect a return on your investment?
This answer gets complicated depending on the goals of the business, but a short answer is 3-5 years either in the form of a dividend or an exit.