The Community Fund: How We Source, Select, and Support Startups
How venture capital funds source deals, select and support startups is still opaque in the industry and we want to change that at The Community Fund (TCF). We believe that to build community we need to be transparent in our processes and build in public because we want to keep real, stay accountable, and bring you on our journey. So, in this post, we’re pulling back the curtain for you to peek into who we are and sharing our approach to sourcing, selecting, and supporting startups.
What is TCF?
The Community Fund is a $5 million early-stage fund that invests in community-driven companies through a wildly different investment partner team. We believe that companies with community at the center of all that they do will become unicorns and produce outsized returns. We focus primarily on investing in North America and write $50K checks.
How do you define community-driven?
— @lolitataub
We define community-driven companies as companies where…
🙋🏽♀️ customers identify as members
✨ members are able to create value for other members
💸 members start the marketing and sales flywheel
Side-note: a community-driven company can have the community be its product or have a community built around its product and come from any sector and can be either B2B (e.g., MongoDB, Salesforce) or Consumer (e.g., Peloton, Glossier)
If you’re curious to learn more about what community-driven companies are and why we’re investing in them, read our post: Community-Driven Companies: What They Are and Why We’re Investing in Them.
Community-Driven Companies: What They Are and Why We’re Investing in Them
How did TCF get started?
It happened after Jesse Middleton and I connected on Twitter. You can read the story here.
— @lolitataub
How did you recruit TCFs investment team and who is on it?
TL;DR we opened up an application to the public and we selected 11 investment partners who have complementary skill sets/expertise, communities, and backgrounds. You can learn more about the specifics of our recruiting process here and learn who makes up our investment team here.
Access the airtable here.
What’s TCF’s sourcing approach?
Sourcing (AKA finding the companies we’ll invest in) comes primarily from the:
🌐 the deep and wide networks that our investment team has fostered through their day hustles, expertise, investment focus areas, and communities (get the deets here)
🗳 our startup submission form at thecommunity.vc.
The benefit of leveraging the power of the team’s communities is having a broader reach than other funds and seeing companies that Silicon Valley funds are not seeing. Our deal flow is definitely differentiated.
Access the airtable here.
What’s TCF’s selection approach?
The Community Fund’s investment selection process is simple but effective. We select companies that we believe will become unicorns as a team. From an individual investment partner perspective, we all:
✅ First, we assess for alignment with our community-driven thesis
🕵🏽♀️ Then, we analyze foundational business/team elements (e.g., vision, market size, problem, solution, competition/differentiation moat, go-to-market/business model, traction/financials, roadmap/milestones to achieve, fundraise/use of funds, team/advisors/investors)
📝 That’s followed by an investment memo write-up, pitching it to the investment team + identifying a buddy*
☎️ After that, we run reference checks, review DD docs
💰 And if everything checks out we sign docs and wire money
*Our process requires that the lead on a deal identify a buddy who will also vouch for a deal to be done. If an investment partner identifies a buddy who also has conviction (co-conviction) on the deal, we’ll write a check. If an investment partner is not able to find a buddy out of our team of 13, we will pass.
What is co-conviction?
The Community Fund operates under a “co-conviction” investment model whereby any partner* can sponsor and make any investment if they bring a second partner in to co-sign on the deal. This leads to fast and efficient decision making while also allowing the entire team to get a chance to weigh in, share insights, and ask questions of the founder and the sponsoring partner.
*It is our belief that the best pre-seed and seed-stage investments come from an investing partner’s unique background and understanding of the particular challenges, needs, and opportunities within his or her communities. Our investment partners’ unique outlook will ensure our best shot at identifying future unicorns. So, if two partners have conviction in a deal’s likelihood to succeed, we will back it.
What does TCF’s support and value add to startups look like?
To us, stewardship is all about how, we as investors, support founders post-investment. The support the TCF team provides our portfolio companies includes access to our communities (to enable sales, recruiting, partnerships, and more), access to funding beyond TCF’s check (to fund), and operational expertise (to build).
✨ Access to our communities — Our team’s collective communities include: Latinx community, Republic, Lightspeed, LatinxVC, Women in VC, SoGal, Renaissance Collective, the Emerging Venture Capitalist Association, Women 2.0, Techstars communities, Global Shapers, Muslim Urban Professionals, Creative Destruction Lab, Next Canada, Female Founders and Women in Engineering communities, AfroTech, Management Leadership for Tomorrow, Forbes 30 Under 30 communities, Major League Hacking’s 65,000+ developer community, The Riveter communities, Y Combinator, Endeavor communities, National Black MBA Association, The Consortium, WeWork, underestimated founder community, Dreamers & Doers, AllRaise, Technolochicas, Drift, Republic, Catalyte, Flybridge, Fast, Snowflake, Blavity, Brud, and Squire.
👩🏽💻 Expertise — Our team’s collective expertise includes: B2B, Sales, GTM, BD, SaaS, Finance, Ecosystem building, Consumer, Marketplaces, Product, Engineering, Martech, FinTech, Commerce enablement, Marketing, Startup Operations, Future of Work, Deep-tech, Engineering, Fundraising, Media, Mobile Security, Entrepreneurship, Leadership, Developer Communities, and Business Strategy.
💰 Fundraising — Our team can support fundraising strategy and liaison introductions to angel and VC investors in our networks. Beyond our general investor networks, our team has direct ties to the following investment vehicles: Flybridge Capital (our LP), Lightspeed Scout (Cheryl, Aaron, and I are scouts) Fund, Cannon Scout Fund (Aaron is a scout), Sam Altman’s Scout Fund (Dave and Sung are scouts), and Republic (Cheryl leads Partnerships).
“If I’m the founder of a community-driven company, what’s the best way to connect with TCF?”
The easiest way to connect with us is to submit your company information on our website: thecommunity.vc. As you go through the form, make sure to select the investment partner that’s best aligned with your company. See info above on each partner (e.g., their area of expertise, investment focus areas). If we’re a fit, we’ll reach out.
The Community Fund: How We Source, Select, and Support Startups was originally published in The Community Fund on Medium, where people are continuing the conversation by highlighting and responding to this story.