November 28, 2024

Winning the deal: The rising importance of strategic support



Early-stage investments are the foundation of innovation, acting as the catalyst for transformative ideas. What used to be the space of business angels has grown into an exciting arena where many different players come together to support new startups. Venture capital firms are actively entering in the pre-seed market, drawn by promising ideas and the opportunity to partner with startups from their earliest days. This shift has expanded founders' funding options, but it has also raised the bar for investors. Simply writing a check is no longer enough.

Today, investors must prove their worth to win the deal. In more developed startup ecosystems, founders are increasingly selective, prioritizing investors who bring strategic insights and operational expertise to the table. The competition is intense, and a single negative reference from a portfolio company can derail an investment opportunity. To succeed, investors need to offer more than just capital - they must cultivate a strong reputation and demonstrate concrete value that drives a startup's growth.

Europe's evolving VC landscape: learning from the best

To refine and strengthen our vision at IAG, we’ve gone beyond Italy, exploring some of the world’s leading VC ecosystems to adopt best practices. Starting with Israel and Silicon Valley, we’ve recently returned from Berlin, which has been particularly inspiring.

In Berlin, we met top notch investors who, early on, mastered the art of demonstrating their value in tangible ways. Some venture capital firms excel at helping startups expand internationally, others specialize in connecting founders to American investors, while others focus on crafting effective go-to-market strategies.

What impressed us most were the VC firms that have turned their platform models into a true competitive advantage. Firms like Cavalry Ventures, Project A, and b2venture have perfected the art of building ecosystems that combine capital with operational support, setting new standards for VC platforms.

Cavalry Ventures leverages its network of LPs, founders, and advisors, coordinated by its platform team, to offer support to its portfolio companies. Remarkably, they activate a community of over 75,000 individuals to assist their founders.

Project A, a German fund launched in 2011 with €1 billion in AUM, stands out for its dedicated team of over 100 full-time functional experts who provide hands-on support in areas like software engineering, product development, business intelligence, branding, communications, data, marketing, sales, and recruitment.

B2Venture, has built one of Europe’s strongest networks of angel investors, dedicated to identifying, supporting, and scaling future standout companies from seed to IPO. Its unique community spans generations of experienced entrepreneurs and investors, all united in their commitment to empowering the next wave of founders.

Building Italy’s Competitive Edge in VC

Established funds that traditionally focused on Series A (or later-stage Seed rounds) are now stepping into earlier stages, eager to secure high-potential deals before their competitors. This increasing competitiveness has fostered a “win-the-deal” mentality, even here in Italy, where demonstrating a fund’s unique value-add has become just as crucial as providing capital.

So, you don’t have to look far to see examples of this shift. In Italy, major players like P101, Primo Capital, 360Capital and United Ventures (among others) are redefining their approach by incorporating robust support structures into their strategies. These firms are working to create investment platforms capable of supporting entrepreneurs from pre-seed to later growth stages. They’re leveraging analytical tools, adopting data-driven approaches, and building structured mentor networks to provide hands-on support. Their goal is clear: to deliver not just funding, but a comprehensive framework that empowers startups at every stage of their journey.

IAG & EDEN Ventures - What’s next?

At IAG, we are dedicated to keep building something truly remarkable: a Network-Powered Venture Capital firm that delivers strategic value at every stage of a startup's journey.

The key differentiator is our angel network, a diverse and dynamic community of 500+ highly engaged individuals. They are seasoned entrepreneurs, top managers and executives in various industries, and domain experts who know many other key people in the industry. This network creates a powerful snowball effect, amplifying opportunities for growth and collaboration.

Each angel’s engagement is strategically coordinated by our team, ensuring their expertise is aligned with startups’ goals and effectively leveraged to provide as much value as possible. This model is working well, but can be improved - and that’s what we are working on right now: we’re cooking something extraordinary, a perfect recipe for our founders.

As a starter when we realized the VC ecosystem was moving faster than us, we launched Eden Ventures, our nano VC fund designed to invest with speed, flexibility, and a founder-friendly approach. Eden Ventures’ portfolio already counts 18 stars, spanning fintech, AI, sustainability and HR. Each investment is a testament to our belief in founders with bold visions and the tenacity to turn them into reality. Through our founder-first philosophy and robust network, we’re dedicated to enabling the next wave of startups to grow, innovate, and close the gap with Europe's leading nations.

In the ever-evolving world of early-stage investments, standing still is not an option. At IAG, we’re not just keeping pace - we’re working to lead the charge. By combining the power of our extensive angel network with the agility of Eden Ventures, we’ve set the stage for something extraordinary.

This is more than just a strategy; it’s a commitment to our founders, to Italy, and to our startup ecosystem. As we refine our model, adopting lessons from global leaders and leveraging the unique strengths of our community, we aim to set a new standard for what venture capital can achieve.

The future of VC belongs to those who dare to innovate and collaborate, and at IAG, we’re proud to be shaping that future. What’s next? Stay tuned - you won’t want to miss it here and on LinkedIn!

Riccardo Vanelli, Associate Italian Angels for Growth