Active Venture Investing: Our Secret Sauce

Our years of experience operating as entrepreneurs, raising capital and working with VC’s has led us to believe that certain things are missing. When was the last time your VC helped you design a marketing plan? Have you ever met a good investment banker who can help implement a sales strategy? Does it seem logical that a VC partner can sit on eight boards and still play an “active” role? Traditional Venture Capitalists simply don’t have the time or the energy to dedicate significant effort to each individual portfolio company.

 At Cava, we believe it is exactly this time and energy spent working with entrepreneurs at the earliest business stages that is core to a company’s progress. Growing a successful startup is dependant on an entrepreneur’s access to resources at the appropriate time. Our philosophy is to have our Partners and veteran Ecosystem work side by side with entrepreneurs, as early as possibly, in order to help create a model for growth moving forward. 

In addition to providing significant capital, we have developed a proprietary planning process to add value above and beyond traditional venture firms. By working extensively with members from the Ecosystem, we help implement a strategic business framework that our portfolio companies can utilize going forward. The process is divided up into three phases:

Throughout the course of due diligence, we revisit the company’s business model and underlying assumptions to find areas of strength, weakness, opportunity and threat.

Post investment, we help refine the model to incorporate execution strategies and goals (organizational, business development, concept or product development, financial, marketing, operational, etc.) for the company’s management team to accomplish. The purpose is to agree on growth requirements for the company and methods to tactically assist the team in achieving their goals on an ongoing basis.

To stay ahead of changing conditions, we revisit the process with management at regular intervals to assess current and future opportunities.

 

While such strategic guidance is unavailable to most portfolio companies at this early stage, Cava provides it as a matter of course. We call this Active Venture Investing (AVI) and apply the model to only a select few opportunities per year, permitting us to dedicate appropriate resources to each portfolio company. More time and energy spent with our companies enhances the likelihood of success, resulting in better returns for our investors and entrepreneurs alike.

Over the course of an investment, we always make ourselves available to each entrepreneur and are willing to assist in all phases of execution. In fact, we will even have members of the Ecosystem available to fill interim roles as needed. We’re not here to intrude! We are here to work with our entrepreneurs, helping to architect the right vision for each company at the earliest stages of its life cycle. We believe this model enhances an entrepreneur's ability to run their business more effectively and efficiently from the beginning, building more value for you and us.