Top Tier Founders, by our Definition
A common topic that we see discussed in the investor world is “we’re investing in top tier founders.” Of course- this depends on what the thesis of the fund is. We believe that our method of investing allows us to access the best founders in the UK that match our thesis, which is the “best of the overlooked.” What does that mean?
What most investors look for
Most typical early stage UK VC’s look for criteria along the lines of:
Top-tier cofounding team by way of experience and education
Product with revenue (rarely will they look at something pre-product)
A unicorn opportunity (because according to power law, if it’s not a potential fund-returner it’s not worth investing in)
Which is not totally wrong, but that means that over 90%+ of the entrepreneurial community that are being shortchanged by this criteria, including:
“Friends and Family” round founders who need initial capital to jump into their project full-time without having to rely on bank loans or rich family members
Founders building great projects with product-market fit that may fall just short of being a fund-returner
“Indie-Hacker” style solopreneurs who have enough talent to build a profitable/exitable Micro-SaaS out of their bedroom
UpsideDown VC was started to provide funding for the 90+% of founders who struggle to access it, providing a win-win situation for both founders and LPs. LPs receive downside protection because of the usage of the CFEA instrument in 50% of our portfolio, while founders receive maximum flexibility because our usage of either CFEAs or pure SAFEs means they can grow how they choose, not how we tell them to.
What we look for
Friends and Family Round
At this stage, we’re looking for highly talented individuals with the potential to be fantastic in whatever they do (but especially entrepreneurially). Thus, here are the characteristics that they should have:
SaaS and Consumer Goods
Capital Efficient
A validated idea, with tangible evidence of initial demand
Pre orders > Phone numbers > Emails
A realistic path to a minimum £50M exit
An idea that’s not a “tarpit.” Examples:
An individual earning potential of at least £30K per year (by which we will validate via Stepex through the usage of resumes and skillset analysis)
Later Pre-Seed/Seed
UK HQ’d
SaaS and Consumer Goods
Capital Efficient
Working prototype/MVP/proof of concept
A realistic path to a minimum £50M exit