Dec 18, 2021Liked by Nicolas Colin

Hi Nicolas-

I’ve pulled together all the inv memos I can find here: https://www.alexanderjarvis.com/venture-capital-investment-memo-collection/

I’ve blogged on startup memos such as Rippling, Airbase and I think 2 others as well. I personally do not like them for startups, but for a few reasons.


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Dec 29, 2020Liked by Nicolas Colin

Thanks for sharing Nicolas!

Very interesting information.

I would like to emphasize the difference between Market and Industries, which I think is superimportant, and source of so many mistakes by entrepreneurs (at least in healthcare and life sciences, my industry).

John Mullins (LSB), author of "The New Business Road Test" and "Getting to Plan B" (with venture capitalist Randy Komisar), explained it this way (which was very useful for me to understand the difference):

Market and Industries: what is the difference?

• A market consists of buyers (people or organizations, and their needs), not products.

• An industry consists of sellers (typically organizations) that offer products that are similar and close substitutes for one another.

Why is the market-industry distinction important?

• Because judgements about the attractiveness of the market one proposes to serve may be very different from judgments about the industry in which one would compete.

• The questions asked to assess market attractiveness are different from those for industry attractiveness (a point easily obscured when words like “sector” and “space” are used indiscriminately or carelessly in the opportunity assessment process.

Market = Buyers (→ Demand)

Industry = Sellers (→ Supply)

Mullins states that the mistake #1 that entrepreneurs make is that they "get blind-sided by the attractiveness of the market":

The entrepreneur gets enamoured of the market (how big it is and how fast it is growing)

o Data from market research

o Talk to potential customers

But, what about the industry?

o Is this an industry in which I really want to compete?

o And in which I can compete?

o Do I have a chance to maintain sustainable competitive advantage over time?

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I 100% agree with the importance of making the distinction. For years, I've seen people being confused by discussions about "sectors". I had to reflect a bit, but then settled on the following:

• An industry is an entire value chain made of different sectors

• An industry (sellers) serves a market (buyers)

Tren Griffin complements it quite well with the concepts of "profit pool", transfer pricing power, etc.

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But what about future of VC? Dapphni like structures etc?

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Sure, I'm convinced there are many ways to reach a decision re: investing in a tech startup, and there's a lot of innovation out there, including with platform-like approaches such as Daphni's.

This 👆 is the outline I'm using to make my own opinions (and I think in an investment context it's important to form individual opinions separately, before confronting them)—it's also a basis I use to structure my conversations with entrepreneurs, esp. in a fundraising context.

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