AlphaPrime is one of the very few institutional investors globally who focus exclusively on safety and security; we have a prolific and high-quality deal flow. However, we acknowledge that the world needs far more safety and security companies than the handful that AlphaPrime can invest in. As a result, we have decided to leverage our networks to help forge great marriages between entrepreneurs and investors, for those companies we invest in and for the many great companies we pass on.
Insiders know that venture capital is one of the most inefficient industries in the world. Not only do VCs invest in less than 1% of the companies that they screen each year, but the whole process of getting to the right investor is mystifying. For most entrepreneurs, it is incredibly difficult to identify the investors that like their stage, sector, business model and geography. Although some VCs do a good job of explaining this on their websites, many don’t (and reserve the right to change their focus at any point) and other investors such as angels and family offices deliberately hide themselves and their investment predilections from the world.
And yet investors also have a perpetual deal flow problem. They need to see many good deals every month, and know when a company is considering fundraising. Although some firms, like AlphaPrime, do outbound research in particular verticals, many firms simply don’t operate research divisions and are more reliant on inbound queries.
Most of us who have been in venture for a while, have passed on many companies that ultimately deliver magnificent returns to the investors who had the courage to invest in them. Sometimes we pass on the company for no fault of their own. They might be outside our geographic area, they might be too early or too late or too expensive, they may land on our desk right when we’re jammed on other deals, or when we’re skittish about a subsector because of another portfolio company’s problems. And let’s face it – sometimes there are days when we just don’t get the entrepreneur’s vision.
The fact that a particular VC passed on a particular investment, is often completely uncorrelated to the ultimate success of that company. Bessemer, one of the oldest venture capital firms in the world, used to publish their “Anti-Portfolio” on their website: a list of amazing companies that they passed on, but turned out to be spectacular investments and exits for those that who had invested in them. There absolutely are diamonds in some of the companies we don’t invest in.
At AlphaPrime, we’ve been ruminating on how we solve this problem. How do we give entrepreneurs access to the right kind of investors? How do we give investors access to the right kind of companies? How do we ensure that essential safety and security innovations get funded and get to market, instead of dying quietly in our inboxes? How do we share our unique insight into the sector’s investor landscape and our connections with the investors and entrepreneurs who need it most, without drowning under a load of manual email introductions?
AP Vector™ provides a first-of-its-kind solution to this problem. Through AP Vector™, AlphaPrime will open-book its deal flow, enabling entrepreneurs and investors to benefit from our connections and reputation. Entrepreneurs complete a quick online questionnaire about their company and indicate the type of investor they want to connect with. Similarly, investors complete a profile about what they are looking for in terms of investment opportunities. On a monthly basis, our AP Vector™ system crunches the data and curates for each investor a list of the companies that month that meet their criteria. Investors can then reach out directly to the companies that are of interest.
We don’t charge for AP Vector™. We do it because it’s the right thing to do. It benefits entrepreneurs and investors alike. And it enables us to build deeper relationships with all parts of the community. AP Vector™ is one of those rare win-win-win moments and an example of how the power of networks can benefit us all.
Click here to submit your company’s fundraising to AP Vector™ or to join our investor community.
About AlphaPrime: AlphaPrime harnesses the power of networks to fuel the next generation of safety and security companies. AlphaPrime Ventures invests in early stage technology businesses that have the potential to deliver high returns in a 5-7 investment horizon, and is comfortable both leading and following financings. The firm also forms special purpose vehicles of curated investors, for later stage, shorter duration, opportunities in the sector. The firm leverages its three proprietary safety and security networks of advisors, investors and customers to help companies in the sector realize their potential. To learn more, visit www.alphaprime.com
