Our Story. Our Mindset.

Our Story

Venture51 invests in high technology companies, and is based on the premise for a new, modern venture capital firm that supports the most promising founders in high-growth markets. We focus on investments after the Seed Round, but prior to the Series A Round, in a niche we call the “Traction Round.” We bring our own entrepreneurial experience, relationships, and marketing/product expertise to the table. We like to back passionate, experienced entrepreneurs who are focused on creating highly scalable technologies and significant value propositions for their customers.

In The Beginning

Ryan, Brandon and Boz (along with a handful of engineers, designers and growthhacks) formed Venture51 Labs to create and scale digital products by bringing together the best ideas, talent, resources and financing through a centralized platform.
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The VC Evolution

Around 2009, several common themes were forming in the venture capital industry, especially at the seed level. These themes included lower startup costs, and faster company evolution.
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First Fund Launched

Venture51 launches it's first fund, and starts placing investments in the seed, and traction round. The firm was one of the first to start investing specifically in post-seed financing rounds.
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Venture51 Makes 40+ Investments

The firm fully deploys the capital from Fund I into more than 40 startups. Notable investments from this fund include: DoubleDutch, Videolicious, Betable, eToro, SpaceMonkey, Life360, and Tout.
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Fund II Raised + Deployed Into 16 Startups

Venture51 Fund II was raised, and then deployed into 16 high-growth startups. Notable companies include: Betaworks, Classy, Fitmob, Honk, Wedpics, and Zealot Networks.
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Inaugural Post.Seed Conference - Huge Success

In December of 2014 Venture51, in partnership with Vator.tv and Bullpen Capital launched the first annual Post.Seed Conference. Speakers included Peter Theil, Naval Ravikant , Chris Dixon, and Keith Rabois.
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Fund III Raised - Deploying Capital

In the beginning of 2015, Venture51 began deploying capital out of Fund III. Notable investments include Reserve, A PLUS and Classpass.
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Our Thesis

Venture51 offers a unique fundraising model that bridges the gap between initial seed money raised from traditional Seed Funds, Micro VC’s, Angel investors and the much larger investments that characterize traditional Venture Capitalists. Our thesis is comprised of a few thematic clusters and investment criteria which enable to us to align with the emerging realities of the modern breakout startup.

Mobile

Apps are cool, but they don’t change the world. Platforms that facilitate the mobile movement in terms of monetization, development and infrastructure do.

Internet

We are interested in the 3rd phase in the evolution of the World Wide Web, based on the idea that the Internet ‘understands’ the pieces of information it stores and is able to make logical connections between them.

Enterprise

The edge of the SMB and departmental enterprise where software has a network effect in its proliferation in the business.

Consumer

Within a decade, Internet access on our mobile devices (cell phones, smartphones, pocket pcs) will be as popular as text messaging. This will make the Internet always present in our lives: at work, at home, on the road.

New Commerce

The old models of e-commerce are changing with the rise of group-buying, micro-payments and collaborative consumption.

5 Strategic Models

Our Model Stack visualized

Post-Seed Investment Criteria

While we have no steadfast rules, the topics below are what we look for in every traction round investment.

Traction

We rely heavily on quantitive proof of market demand. High traction demonstrates product market fit and is valuable in evaluating a company’s viability.

Market Size

A large and well positioned market is the most important factor in a startup’s success or failure. A market with a lot of real customers always pulls a product out of a startup, not the other way around.

Remarkable Product

An incredible user experience lies at the intersection of technology, business, and design. The Unfair Design Advantage (infographic found on “resources” page) is the application of these principles to build a truly remarkable product.

Team

An ideal team is composed of a trio of front-end, back-end and growth engineers. Multi-Disciplined teams who have experience working together are highly sought after.

Investment Size

Average initial investment of $750K, ranging from $500K to $1M, with selective follow-on reserves.

Ownership

Our initial ownership target is 7 – 10%. (These initial targets are put into place to preserve at least 7% through the B round.)

Capital Efficient

Burn rate and runway are very important startup indicators. A company that uses capital effectively is much more likely to succeed in the long run. We look to extend runways for 15 – 18 months.

Position

We have the ability to lead, co-lead, or follow other firms or angel syndicates in investments depending on the situation.

Geography

We focus on investments in the Bay Area, New York and Southern California. However growing markets like Austin and Boulder are also interesting.

The Ethos

What’s behind the name is a philosophy that encompasses our company. By lifting attributes from iconic objects and beliefs, we can combine them into an agile, efficient, and remarkable firm.

Warbird Mentality

The P-51 Mustang is one of the most celebrated fighters of the 20th century, and is universally revered by pilots as the most beautiful, agile, and long-range aircraft of its era. Its raw horsepower and elegant curves combine to produce an icon of design and engineering. Outside of its beautiful shape, speed, and maneuverability, what made the P-51D special was the Packard built V-1650 engine which gave the P-51 an incredible top speed, and a ceiling of over 41,000 feet. By applying the attributes of the P-51 to our brand, we constantly remind ourselves of these qualities as we look for breakout startups

A Touch of Purple

Seth Godin’s book, The Purple Cow, is a blueprint for how we think marketing execution should be done. Business is not about creating a product then flipping the marketing switch. Rather it is about creating a remarkable product, something that people will notice. Purple cows are rare, but when they are built, they make waves. We’re on a mission to find remarkable companies that have marketing baked into the essence of the product. Once an experience is nailed, growth is natural.

The Process

The best way to get in touch is through an introduction from someone who we know mutually. We place a high value on companies and founders that are referred/endorsed by people we know and trust. That includes Venture51 portfolio founders, commuity members, mentors and advisors, co-investors and others we work with on a regular basis.

50,000 ft Flyby

We receive a product (URL, App or Device), high-concept summary and pitch-deck (summarizing the opportunity (in no particular order): market potential, traction, product vision, idea genesis, team, competition, fundraising mechanics, etc. Latest product revisions and metrics (non-vanity) required.

10,000 ft Partner Dive

Once we establish that the opportunity meets our core criteria: themes, thesis, geography, stage, and size of investment, we socialize it internally between all partners and associates.

We quickly gauge whether there is any risk of competition or overlap with the rest of our portfolio –any conflict will automatically relieve us in participation. Given our active involvement with our companies – especially at the early stage – we avoid any overlap or risk of conflict at the time of the investment. If a company is found not to be a fit, we try to let them know ASAP.

3.5 ft Team Pitch

If we are interested in learning more, we set up an initial Web and conference call.

We strongly prefer first meetings over the Web, as it gives us the ability to get down to initial business quickly.

This meeting is to validate the pitch-deck data, dive into the traction metrics, evaluate the product, and most importantly, get a feel for the founders.

Meet The Team In Person (Culture Check)

If the Web pitch goes well and we are interested in a deeper dive (like the team, value the product, and see product/market fit – we go to the founder(s) for a visit). We strongly prefer to conduct these meetings in person, as this is an opportunity for us to determine whether or not we can work with each other culturally. Typically, this meeting involves one member from our team.

Deal-Swarming Due Diligence

Favorable meetings lead to additional conversations, deep technical dive, data modeling, discussions with our contacts (non-competitive) and experts in our network and reference/background checks. One of the goals of our deal swarming is to spend time together to establish that we have culture fit.

Opening (Terms)

This stage is where we “open” of the relationship. Most investors refer to this as closing, but for us it’s the beginining of something big.

If everything checks out for both sides, we’ll talk terms –based either on what has been discussed with the lead of the startup’s round, or on matters we’ll discuss if V51 ends up in lead position. In the latter case, we make an offer via a termsheet – including clean, simple terms. If the discussion (and sometimes a bit of negotiation) is satisfactory to both sides, we commit to the round and invest, once the legal documents have been drafted by counsel and reviewed by the law firm representing the investors.