Blog posts tagged in Dealflow
According to Fundable1, fewer than 1 in 100 startups are funded by angel investors. Funding from venture capitalists is even rarer at about 1 in 2,000 (0.05%) companies. For a firm that prides itself in proactively finding advanced materials investment opportunities (as described here by Pangaea GP Keith Gillard), that means we’re screening a lot of companies that we don’t end up investing in. By the numbers, many of these companies often don’t end up raising outside investment from other VCs or angels either...
People often ask us, "Where does Pangaea find all its deals?" The answer is quite proprietary: We've developed channels to over 120 universities and research centers; we are reading patents daily; we follow the work of individual researchers sometimes for years before engaging with an eye to invest. The key is that we generate the majority of our dealflow proactively, and with good reason.
Way back in 2006, Bill Aulet, now Managing Director at the Trust Center for MIT Entrepreneurship, invited me to be part of a panel discussion on corporate venture capital (CVC) as part of the 9th Annual MIT VC Conference. Bill gave a wonderful and detailed presentation, showing how CVC worked, adding the financial returns to strategic value. His model suggested that the financial returns might be insignificant compared to the strategic impact for the greater corporation. In the spirit of his pre-panel suggestion to be contentious and confrontational, I spoke up: "Bill, that's a good model if you want your CVC to fail."