How does 2048 Ventures select companies to invest in?
September 23, 2019
In this video, Alex Iskold, Managing Partner at 2048 Ventures, shares with us how 2048 Ventures selects companies that they want to invest in.
“We have a massive amount of deals coming our way and we have specific filters that we use”, Alex Iskold
Venture capital firms need a way to narrow their application pool. Often times, VC firms use filters to shortlist deals. Alex Iskold shares how his company approaches this and some of the other things they consider when trying to select companies to invest in.
2048 Ventures’ selection process
Like most venture capital firms, 2048 Ventures deals with a high volume of prospective companies that want funding.
Because of this volume, firms can’t individually review every applicant. To alleviate this problem, they use filters that narrow the application pool.
Some of the filters that 2048 Ventures use are differentiating technology, being early stage, pre-seed deals, and first-time founders.
Every firm has their own parameters so that they can become more knowledgeable about specific markets.
2048 Ventures is geographically agnostic meaning the physical location of the company doesn’t necessarily matter but other firms may only want to invest in companies located in one particular area.
These are only some examples as filters can vary widely.
Matching investor strategy criteria
Founders should therefore do research on various firms and see where they would have the best chance of being selected.
Adequacy of the founder profiles
And just as the founders will do research on the firms, the firms will be looking at the founders as well, not just the company.
They want to see how founders fit into the market. On paper, such as presented business plans, founders may appear like a terrific candidate.
If the firm doesn’t feel that the founder is in the most appropriate business, the agreement may fall through.
Investors and founders fit
There is always a right fit for investors and founders. Filters help find this fit but the relationship between the individuals can potentially be the deciding factor.
About Alex Iskold
Managing Partner and Co-founder of 2048 Ventures
Alex Iskold is a co-founder and Managing Partner at 2048 Ventures. Prior to 2048, Alex spent 5 years at Techstars as the Managing Director of its NYC program, where he invested in and helped over 100 startups. Alex was previously the founder and CEO of Info Lab (acquired by IBM), founder and CEO of GetGlue (backed by USV, RRE, Time Warner), Chief Architect of distributed computing startup DataSynapse, and a software engineer at Goldman Sachs, D.E. Shaw and Thinkmap.
Alex also taught an award-winning undergraduate computer science class at NYU. He holds a B.S. in Math with Honors from Lehigh University and M.S. in Computer Science from NYU. Alex writes one of the top startup blogs called Startup Hacks.