After decades of little change, venture capital is in a period of rapid evolution. New platforms like AngelList are cutting out seed investment firms. Up-and-coming funds with hot “brands” are stealing away deal flow from established VC’s. And providing services like marketing and recruiting is now table-stakes for a venture firm. VC’s are selling themselves to startups as much as startups are selling themselves to VC’s.
The next move is transparency. As a private alternative asset, venture capital doesn’t have to be transparent. Typically returns are only disclosed if one of the firm’s LP’s is a public pension which chooses to do so (such as CalPERS). Venture capitalists don’t have to have a website, they don’t have to talk to the press, they don’t have to blog, or Tweet, or even disclose who they’ve invested in.
That is changing though, as venture firms realize the more open they are, the better they can compete for the best deals. Firms like Andreessen Horowitz, First Round Capital and Battery Ventures have even hired journalists to create promotional content for them.
Today an Israeli firm called Kima Ventures has taken it a step further, addressing one of the biggest pain points in founders raising money: the time suck.
Normally, an early stage founder gets an introduction to a VC through one of its portfolio companies, they meet, and if all goes well, the founder will present to the firm’s entire group of partners. Then the firm will take its sweet time deciding whether to invest. Founders have to repeat this dozens of times before they find the right investor, and often, they get the dreaded “maybe” which never turns into a “yes.” It drags on for months. I’ve heard it many times, including from our own CEO: raising capital is all-consuming, and a huge distraction.
Many VC firms promise they make quick decisions. Today, one is attaching a time frame to it.
Kima Ventures announced it will now make investments in 15 days or less with its new program, Kima15. The firm will decide early stage deals within a week, thanks to fixed terms that are non-negotiable: Companies in the program will get $150,000 for 15 percent of the company at a set valuation of 1 million post-money. No follow-on investment will be made.
It’s refreshingly straightforward: these are the terms, apply if you like them. “Speed is crucial for entrepreneurs,” said Kima Ventures co-founder Jérémie Berrebi. “They don’t have time to lose by waiting months to get answers.”
Kima is accepting applications through AngelList. (Companies can apply the same way they now apply to accelerators like TechStars via AngelList.) They’ll hear back from Kima within five days as to whether you’re getting the money, and within ten days, it’ll be in their bank accounts.
Already a prolific firm (it calls itself “the world’s most active angel investor”), Kima Ventures will make more than 100 seed investments over the next year, 50 of which will be through Kima15. Since 2010, the firm has made more than 200 investments. The firm is able to move so fast, in part, because it is 100 percent backed by entrepreneur Xavier Niel, who founded Iliad, the French internet service provider.
The autonomy of not having institutional LPs gives Kima Ventures the flexibility to experiment with new models. Associate Vincent Jacobs says he believes Silicon Valley will adopt this model at some point as well.
Experimentation is what pushes an asset class to improve. Josh Kopelman asked at his PandoMonthly interview, “Why is venture capital, the industry that funds innovation, so un-innovative?” With it’s plan to dramatically shorten the investment cycle, Kima Ventures is among those working to change that.
- Kima VenturesThe most active Angel investor in the world
Kima Ventures was founded in 2010 by Xavier Niel and Jérémie Berrebi with the goal to support and finance innovative companies with seed capital all over the world. Since founding, we have backed over 200 startups in 23 countries and on average continue to make two new investments every week.
We mainly considers projects in the internet industry at large, as well as mobile, video games, software and telecom applications. We seek to invest in capital-efficient companies that can achieve profitability without needing to raise a lot of money initially.
Our goal has always been to be entrepreneur friendly and we have always invested rapidly (2 to 4 weeks), unlike conventional venture funds (3 to 6 months), allowing our companies to raise initial financing from our fund and then raise more money later through traditional venture capital firms. In order to make it even easier and faster for companies to raise funding from us, we have launched Kima15.