This document provides advice on how venture capital firms can position themselves competitively through branding, marketing, and clearly communicating their value proposition. It emphasizes defining an investment thesis focused on specific industries, stages of funding, and deal sizes. It also stresses developing a unique value-add service that portfolio companies need and marketing activities to generate dealflow. Finally, it discusses fundraising by targeting the right limited partner profiles and addressing their needs and motivations for alternative investments.

1. The Helpful Purple
Polka Dot VC
How to Position Your Unique “Value-Added” Superpowers
for Better Branding, Marketing, Fundraising & Dealflow
Dave McClure
Dec 2018

2. Dave McClure: Nerd, Hillbilly VC
Geek, Engineer, Marketing, Blogger, Entrepreneur, Angel Investor, VC
● Born in WV (‘66): Hillbilly & WVU Mountaineer football fan
● Johns Hopkins (‘88): Applied Mathematics / Engineering, CS
● Silicon Valley (‘89): Programmer & SQL Databases, Intel / MSFT
● Founder/CEO Aslan Computing (‘92-‘99), Internet + Ecom Consulting (small exit)
● Director Marketing @ PayPal (‘01-‘04), Simply Hired (‘05-‘06)
● Angel Investor/Advisor (‘04-‘09): Mint, Slideshare, Mashery, Twilio, WePay
● Founders Fund (‘08-‘10): Lyft, Credit Karma, Twilio ($TWLO), SendGrid ($SEND)
● 500 Startups (‘10-‘17): $400M / 2000 companies / 50 countries / 10 Unicorns

3. How You Help -> Brand + Competitive Positioning
YOU
(THE AWESOME VC)
● What you can do (well)
● What you do better / different
● What you promote / promise
(your brand value)
TARGET
PORTFOLIO
COMPANIES
● What they want
● What they need
● What makes a difference
COMPETING
INVESTORS
● What they say they can/will do
● What they actually can/will do (well)
● What they do that really matters

4. Investment Thesis
● What Kind of VC do you want to be?
○ Stage, Geography, Industry Vertical
○ Fund Size, Check size, Follow-on
○ Lead rounds? Board seats?
● Why You? Are you sure you can do this? (3X / 20%)
○ 1) can you raise money?
○ 2) can you get dealflow?
○ 3) can you help companies? how?
Q: Are there competitors with a similar thesis? Why are you different / better?
Why will great companies come to *you* instead of other competitors?

5. VC Dealflow Funnel
● Thesis: what/how you plan to invest
● Brand: use your value-add to attract companies
● Marketing: activities that generate dealflow
● Evaluation: filter dealflow *before* taking mtgs
● Meetings: in-person evaluation & DD Qs
● Deal Memo: document deals you want to do & why
● Negotiation: specify terms and make / close offer
● Investment: wire the money!
● …
● … (then wait 7-15 years) ...
● …
● OMG UNICORNS!
BRAND + MARKETING
DEALFLOW
EVALUATION
MEETING
DEAL MEMO
TERM SHEET
INVEST!
THESIS “VALUE-ADD”
UNICORNS!
(hopefully)

6. Branding & Marketing: How to Generate Dealflow
● Brand: what’s your name / logo / soundbite / unique value proposition?
○ What’s the story you’re going to tell the market?
● Superpower: what makes you special / why are you different?
○ Is there something you can do that will make companies come to you?
● Marketing: activities / communications to LPs, founders, press, etc
○ Content: writing/blogging, speaking, training
○ Services: are there services you can provide to startups to generate interest?
○ Founders: where do the founders you want to invest in hangout? FIND THEM!
○ Networking: who do you need to know in the industry? VCs? Scientists? Partners?
○ PR strategy: who can help generate news about you / your firm / your strategy?
○ Events & Conferences: should you speak / attend industry events? Should you run events?
○ Online Platforms / Other Investors

7. Help Framework: Why, Who, When, What, How?
● Why Help Companies?
○ Just help them win! (goodwill)
○ Help them with something you’re good at
○ Find out how they are doing (metrics)
○ Build your reputation -> better dealflow
○ Earn right to participate in future rounds
● Who Should You Help? For How Long?
○ Only Winners? Everyone? Even Losers?
○ Until next round? Forever?
○ Until they “win” (or FAIL to win...)
○ Board Seats / Advisor seats?
○ Define when / how you will pull the ripcord
● Define your “Help Framework.”
○ What will you do?
○ Who will you help?
○ For how long?
○ Until something happens? Or forever?
○ Tell them what you expect to get back
● What is Your Unique Help Superpower?
○ Product Development
○ Marketing/Sales
○ People/Recruiting/Hiring
○ Operations/Process
○ Raise More Capital (*not unique)

8. Fundraising: Key Slides in Your Pitch Deck
Core Deck (10 slides)
● Cover: Name / Brand / Image
● Thesis: Basic Fund Concept + Goals
● Team: Bios / Academic / Work Experience
● Track Record: Prev Portfolio / Top 3 Deals
● Superpower: Services / Value-Add
● Competition: Differentiation / SWOT analysis
● Dealflow: Marketing / How to Get Deals
● Selection: Criteria / DD / Process
● Fund Model: [spreadsheet]
● Capital: AUM / Current LPs / Fundraising
Appendix Slides
● Investment Thesis / More Details
● Winners / Case Studies (1 slide per win)
● Team Bios (1 slide per GP)
● Advisors / Mentor Network profiles
● Examples of dealflow-generating activity
● Sample Deal Memo
● Fund Terms / Legal
* emphasize items in blue if you have “hot”
thesis, pedigree, experience, track record
* emphasize items in red if you don’t

9. EXAMPLE: Wingnut Investment Fund
Wingnut Ventures ($20M seed fund)
● Stage: seed investments + some follow-on at Series A/B
● Vertical: internet-connected hardware/software devices
● Geo: US-centric (mostly US tech metros, some non-US)
● Allocation: 40 seed checks @ ~$250K + 10 Series A/B @ ~$1M
● Lifecycle: 10 yr fund + 2 x 1yr extensions; 5 yr initial investment period
● Reserves/Recycle: 50% 1st checks + 50% follow-on; recycle up to 120%
● Fees/Carry: 2% avg mgmt fees, 20% carry (after 1X returned)
● Team: 1-2 partners + 1-2 associates + 0-1 admin

10. Limited Partner Profiles/Issues
Types of LPs
● Institutional
○ Pension Funds
○ Foundations / Endowments
○ Financial / Insurance Companies / Banks
○ Corporates
○ Government / Community
● Private
○ HNW Individuals (“High Net Worth”)
○ Family offices (SFO, MFO)
○ FFF (Friends, Family, Fools)
○ You, Your Dog, Your Cat.
Issues for Potential LPs
● Asset Allocation
○ Equities, Bonds, Cash, Real Estate, “Alternatives”
○ Alternatives = Hedge Fudns, PE, VC, etc
● Time-horizon / Liquidity needs (short vs. long)
● Investing Motivations
○ Pure Economic Returns (perception vs reality)
○ Strategic (innovation/IP, M&A, people, product)
○ Access to Dealflow (industry vertical focus?)
○ Economic Development (Jobs, Ecosystem)
○ Marketing/PR (“It’s cool to invest in VC/tech”)
● Have they invested in VC funds before?
● Have they invested in startups before?
● Interest in Emerging Managers / Early-Stage?