With a drier than usual investment scene, founders are looking for more effective ways to reach the right VCs. To that end, thousands of founders have applied for land capital through a common app in recent weeks, but rather than hoping to end up in college, they hope to raise capital from top investors. The platform they used is Seed checkslaunched by venture capitalist and growth marketing entrepreneur Julian Shapiro about a month ago. Founders are invited to apply using a 1 minute form asking for a deck, memo and region. The app is then beamed to 16 investors, including Conviction’s Sarah Guo, Mercury’s Immad Akhund, and CapitalX’s Cindy Bi—all of whom have unilateral or individual check-writing capabilities.
There aren’t many restrictions, though the group only invests in startups worth less than $20 million (a quick scan of submissions suggests most that apply are worth between $5 million and $10 million). Furthermore, the Seed Checks crew does not invest in CPG or DTC products. Applications are reviewed every two weeks and if a startup is of interest, the founders will hear about the deck within two weeks of submission. The tool has been successful so far: after launching on Twitter and Product Hunt, Seed Checks received 2,000 registrations in two weeks.
SmartPass co-founder Peter Luba, which is building a digital access pass for schools, was part of the first application batch. The founder is undergoing the fundraising process for the first time since he decided to turn Smartpass from a side gig into a full-time startup. Since joining Seed Checks, he has started discussions with four of the cohort investors.
Luba discovered Seed Checks by scrolling on TikTok. Until then, the process of mass emailing multiple investors at once was more informal. The closest thing to a common app-style pitching process was through super connectors in Silicon Valley, which would connect him to 10 investors (talk about FOMO) through a single email thread.
“Fundraising is a full-time job, it takes a huge amount of time and I want to start building again,” said Luba. “Not that this isn’t fun, but it’s not why we’re building a company.”
Some are not immediately enthusiastic about the idea of automation. Sanjay Goel, founder of NachoNacho, was skeptical at first about the idea of a platform trying to scale fundraising. He changed his perspective when he saw the “very smart” investors involved. He’s interested in whether the caliber will help make this effort scale better — but as a three-time founder, Goel still believes fundraising is “a relationship-based activity.” The entrepreneur, who is also an investor, says platforms like Seed Checks can be a source of deal flow, but he wouldn’t want it to be the only source.
Shapiro sees the platform as filling a gap in a market dominated by accelerators offering a standard deal and programming in exchange for equity. Seed Checks takes in applications from founders who historically didn’t apply to accelerators because they didn’t need the help or introduction to a broad group of investors; they just wanted access to the platform’s faces. The platform isn’t alone in trying out the usual app style of pitching. Afore Ventures launched a joint app program in January; as of 8 weeks ago, it has received 1,600 startup applications, or about 200 applications per week. The investor pool has grown from 10 investors, to 30, to 52 individuals or companies.
Bi, a solo general partner building CapitalX, has not yet made investments from the initiative, but she said Seed Checks is more effective than her own inbox when winning a new deal stream. She adds, “the combined brand is much stronger than one.”
“People who wouldn’t normally pitch to me, a GP with a $250,000 check, would now pitch to a group of VCs with the potential to [a million dollar] check,” she told londonbusinessblog.com. “It is more efficient for founders. “Why didn’t other smaller funds do this before?”
Bi’s commentary is urging: While co-investment is common among early stage venture capitalists due to the sheer size of controls and the popularity of lottery rounds, efficiency is of evergreen concern among investors. Especially considering how solo GPs struggle in today’s LP risk averse landscape, focusing on a group rather than individuals can help block out all the noise.
“I know a lot of investors who basically just invest in the best of whatever comes into their inboxes, like the top 10% of deals that go into their inboxes,” Shapiro said. Many, he says, are “not proactively” setting up projects to attract deals to them, either by building a Twitter audience or publishing YouTube videos, or in the case of solo GPs, by invest in a full marketing machine that helps them stay ahead of the curve. from more entrepreneurs.
When Shapiro sought out the 16 investors who would combine to form Seed Checks, he said he was able to convince them to join because of the appeal of combining their collective social audiences to get a better deal flow. “Putting our faces together helped us get higher conversions from the founder submitting pitch decks and, admittedly, much better deals,” he said. Shapiro himself no longer directs people to his own website; he just sends them to Seed Checks.
Another tool that is gaining steam is VC sheetbuilt by Ali Rothe of Outset Capital and Shapiro. The duo created a website that publishes lists of investors based on their stage, location or startup industry. It’s like a more refined, easier-to-search Crunchbase, Rohde explained. The problem with all the tools that aid investor entry is that it can be hard to keep up with changing taste buds. londonbusinessblog.com once attempted to create a guide for active venture capitalists called The londonbusinessblog.com List. It died.
Rohde said VC Sheet differs from londonbusinessblog.com List in that it explicitly focuses on helping provide information about the market for early-stage enterprises; and instead of just offering investors focused on proptech, they opt for lists like New York’s most active pre-seed investors.
“It doesn’t make sense for founders to get a really holistic, in-depth view of the early stage funding ecosystem because they’re only going to go through it once. So figure out who you need, move on, get back to building,” she said. “Over and over again we’re in these conversations, talking to founders, and they ask us who to talk to — and so it actually makes sense that we spend some time compiling that central repository — it doesn’t make sense for a founder to that does.”
Both VC sheet and Seed Checks are free for founders and investors; neither is trying to become a business or access charges. which, because of its accessibility, could play a role in its success.
Shapiro says VC Sheet is trying to solve a bigger structural problem where founders are able to find a suitable investor startup, while Seed Checks is about getting to more than a dozen top investors with priority and ease.
“Seed checks isn’t trying to be a giant solution to the VC ecosystem, it’s not being offered as a panacea,” he said. “It’s just another outlet for founders…a reflection of where fundraising could go for greater efficiency and access.”
If you have a juicy tip or clue about happenings in the corporate world, you can reach Natasha Mascarenhas on Twitter @nmasc_ or via Signal on +1 925 271 0912. Anonymity requests will be respected.
