What kind of companies do you invest in?
- Goal: We aim to invest in category-defining companies where the weight of our network can provide critical value.
- Stage: For our seed fund, we invest in companies with pre-money valuations of $12 million or less. These include both pre-revenue and post-revenue companies. For post-revenue companies, a good rule of thumb for an exciting opportunity is monthly revenue of $10,000 or more growing at 15% month-over-month. For our Opportunity Fund, we intend to invest in companies with revenue between $10 million and $100 million.
- Geography: We only invest in U.S.-based companies.
- Industry: We are fortunate to have over 1,200 Venture Partners, which allows us to invest in a wide range of industries with the benefit of deep expertise. However, we generally avoid companies that require FDA approval.
- Check Size: For our seed fund, we aim to make initial investments of $750,000 to $2 million. For our Opportunity Fund, initial investments are expected to range from $2 million to $10 million.
How does your investment process work?
Our investment process looks like that of a standard venture firm with two exceptions:
- Instead of a traditional Partners meeting, we curate a Diligence Committee for each company. Diligence Committees are made up of a few members of the NextGen team and a small group of Venture Partners with relevant expertise.
- After an investment is complete, we ask entrepreneurs to spend approximately 45 minutes on a group call answering questions from Venture Partners.
Why should I work with NextGen over another venture firm?
NextGen’s network of more than 1,200 entrepreneurs, executives and technologists nationwide commits to helping our portfolio companies with expertise, connections and advice. Members of the full-time NextGen team act as a concierge for our portfolio companies, helping them leverage the network of Venture Partners. The key areas where our team can be helpful are:
- Facilitating 30- to 60-minute conversations with Venture Partners who have deep, functional expertise (e.g., search engine optimization, building a sales team, content marketing, etc.) and are available as needed.
- Making introductions between portfolio companies and customers and/or distribution partners within the Venture Partner network and beyond.
- Making connections to sources of downstream financing, particularly to other later stage venture firms.
- Making connections to potential hires as companies grow their teams.
With such a large network, how do you ensure information stays private?
NextGen places a heavy emphasis on keeping information private:
- Aside from a “teaser” e-mail that goes to the full network and contains only a high-level description of the opportunity, all other company information lives on our private platform, which requires a login and password to access. Company information is not downloadable from the NextGen platform.
- Founders can choose to bar Venture Partners who may have a conflict of interest from seeing any information beyond the teaser e-mail.
- Founders can choose to limit access to sensitive information.