In this article, I get into the details of what OpenVC is, how we built it, and most importantly why.
Warning: This is gonna be a long read...
Who is behind OpenVC.app?
How did we come up with the idea for OpenVC?
In June 2016, I worked at Microsoft Accelerator. Our portfolio startups had a hard time identifying the right VCs to speak with, so I came up with the idea of building a public VC directory for startups.
With the help of 2 friends, we released "A Venture Capital Map for Startup", a hand-curated list of VC funds available on Google Maps. This first attempt was flawed and failed, but the vision was there.
Four years later, I was raising funds for my own startup and experienced once more the trouble of identifying the right VC firms for a project.
After crashing my startup (RIP Petri), I had plenty of time on my hand and an itch to scratch. That was in June 2020.
What problem does OpenVC solve?
As an entrepreneur raising funds, you're expected to:
- List down all the existing funds
- Research each fund's thesis to evaluate a theoretical fit
- Assess the best approach - cold email or warm intro
This is especially true for less connected founders, such as first-time founders and underrepresented founders.
OpenVC turns this horror show into an instant search.
What's in it for the VCs?
The VC industry is moving at full-speed towards more openness.
- VCs want to be more open. The new generation tends to see warm intros as an exclusionary practice and supports cold outreach in a deliberate attempt to be more inclusive.
- VCs can be more open. Better tools and processes have reduced the bottleneck on screening and allow VC firms to handle a larger deal flow.
- VCs must be more open. Heightened competition and internationalization mean that investors have to look beyond their usual sources for deal flow.
As a direct consequence, VCs today need a better way to be found. That's when OpenVC comes in.
What makes OpenVC different from other VC lists?
Short answer: we believe OpenVC is the only sustainable model for a global VC directory.
A global VC database is a massive undertaking. It is a high-volume, low-value, never-ending work. Not only do you have to build it, but you also have to update it continuously.
All that costs money, so you need a robust economic model.
Some players sell the database as a product. Pay $200, download the spreadsheet. IMHO, it's a bad business to be in - low ARPA and no recurrence.
Other players give out the database for free to generate leads or promote their brands. Here, the main issue is not the ROI, but the quality of the database. Since the VC directory is just a by-product, there is little incentive to maintain a top-notch, up-to-date dataset.
Time will tell, but I doubt any of those models is sustainable.
OpenVC flips the problem upside down.
Since people provide data themselves for free, we don't need to worry about profitability. Instead, we can focus on creating a better product that is not ROI-driven but user-driven.
This led to radical product decisions:
- No login required to add or edit data
- The dataset is fully downloadable
- It's free forever
This combo is powerful because it creates a sense of ownership with the users.
It's a virtuous circle: I add data, you add data, everybody creates value. At the end of the day, the dataset is 10x better than what one could build alone, and it's still yours to download. It's a no-brainer.
Won't VCs get spammed?
OpenVC lets investors choose how they want to be contacted:
- Email address, such as firstname.lastname@example.org or email@example.com
- URL, that usually leads to a Typeform, a Google form, etc.
- Warm intro, in which case the founder is sent to the fund's Linkedin page
Unlike indelicate players who scrape investors' email addresses, we let VCs tell founders how they want to be contacted, whether they love warm intros or they hate them. We're also planning a feature where VCs can set up a cap on how many opportunities they receive.
So no, no spam.
What was the reasoning behind some key features?
Here, I'd like to break down the thought process that went into some key features.
"Type of investment" and "Investment thesis"
Coming up with a standardized categorization of VC investments is a catch-22. You want something MECE, self-explanatory, quick to fill, that captures the complexity of each thesis and that can be searched intuitively at the same time. I've always found that the 100+ tags used by Crunchbase and everybody else did a poor job at that. So we drew very large product categories (Software, Deep Tech, Medical Hardware, etc.), then added an open text field where each fund can specify their exact investment thesis.
"Stage of Investment" and "First cheque"
Most VC directories categorize funds by investment rounds: pre-seed, seed, Series A, etc. But the meaning of a "round" can be very different from one country to another, and fails to capture the geographic reality of fundraising. That's why we went with a combination of "Stage of investment" (Idea, Prototype, Early Revenue, Growth) and "First Cheque" (min and max size).
We chose not to include angel investors because they are usually driven by intuitu personae much more than investment thesis. I am not 100% sure about that though. Maybe Super Angels that are thesis-driven and make several investments per year should be added? The same question goes for accelerators and startup studios. We'll see.
What tech stack did we use to build OpenVC?
Airtable for storing data and various JS libraries on the front-end: jQuery, Datatable, ChartJS for the charts, and Leaflet for the maps. The back end is PHP only.
How much does it cost to run OpenVC?
Even though data comes free, OpenVC costs a bit of money to run.
Lucas and I built OpenVC for free. It is a side-project for us, we both have "real jobs" that put bread on the table. We also receive help from people who kindly contribute a bit of their time.
Regarding software costs, that's out of our own pockets: Airtable, Google Domains, Lemlist, Hubspot, Snov.io, Bouncer, Ko-fi, plus some one-time costs that I am not counting here.
In total, that's around $150 per month in software.
Want to support us? Buy us a coffee!
Do we plan to make money with OpenVC?
At least enough money to cover software costs. Ideally enough money so we could spend more time building more features.
One condition though: monetization shouldn't be detrimental to the users:
- We will never charge founders to access the app or use any features
- We will never charge VCs to add their firm and investment criteria
That doesn't leave us with many options:
- Individual backing: One-time and recurring donations from individuals
- Sponsorship: Recurring donations from VC firms and corporations
We are also looking closely at the Ghost.org model, where advanced features would be available to paid users without affecting the "free forever" promise for the masses.
One last word...
Lucas and I spent a lot of time and effort on OpenVC. It may never catch on, and that's fine.
But we did it because it felt necessary. It felt like something that should already exist.
There is no reason why a founder should waste so much time just to gather a list of relevant VCs. All it takes is a friggin Airtable and 5 minutes of everybody's time.
There's also no reason why a VC should have her mailbox drowning in random pitch decks every day. All it takes is sharing what you want and how you want it.
If enough of us play along, we can make the fundraising process more efficient for everyone involved.
So give it a try.
It starts here.