I used to think VC was just finance bros.

But it's actually more than that.

It’s a field that requires a surprising amount of creativity.

At its core, VCs have 2 jobs. Raise LP money. Find/invest in good companies. Everything else is supplemental.

However, it's all the supplemental work that seem to help VCs do their 2 core jobs better, and that is where the creativity lies.

Creativity is a value-add in VC.

Creativity in VC can be found through their newsletter, podcasts, and LinkedIn posts.

The LinkedIn thought leadership, the newsletter they started, and the podcast they started. VC branding has been core to firms like Foundation Capital, rising up to the ranks where they are.

However, traditional VC branding through newsletters, podcasts, and LinkedIn posts is becoming overplayed in my opinion.

Posting simply about events hosted or big news from portfolio companies no longer offers the differentiation it did.

Instead, I see firm branding turning towards the people themselves. I’ve seen strong VC firm brands now tied to the brand of its individual VCs, their personal journeys, stories, and opinions.

Individual VCs that resonate with the masses and offer valuable content seem to attract founder deal flow. They give firm visibility and trust to LPs and create a brand that founders can attach their own brand to.

Having a VC brand is great, but the branding game takes time and consistency to receive an ROI. Alternatively, I’ve seen VC brands succeed by simply not having a public brand like Thrive Capital. They invest well and raise a large fund in silence.

This is another creative take on branding. Having no brand is a brand in itself.

All this being said, being a tier 1 VC is still the ultimate branding tactic.

One of the few things in VC that cannot be automated is relationships.

VCs want to know who they are investing their money into, and LPs want to know who is managing their money.

An LP has expressed interest in the fund. A high-ticket founder is considering letting the fund on the cap table.

Fulfilling community events/dinners are some of the best ways to close these investments that could lead to outsized outcomes.

Being the VC that consistently puts on exceptional events can be a strong differentiator that drives business.

After some time in the space, objectively, Capital Factory has done an exceptional job at this.

Over the years, they’ve hosted events that are now cornerstone events throughout the year, like Austin Tech Week and Fed Supernova, to name a few, that attract thousands of people across Texas and the US to their space.

Beyond Capital Factory’s cornerstone events, there are intimate dinners, happy hours, and monthly startup showcases they host as well. Beyond Capital Factory events, there are entrepreneurs and startup/VC leaders hosting events in their space.

On paper, they appear as a consistent event organizer and host, but what they’ve actually done is create an ecosystem of real business impact through events by getting the right people in the room together.

In the end, putting on events in the startup/VC/tech ecosystem requires creativity.

Creative elements of this not only include where the event is hosted, the food, drinks, but also the frequency of the events, and the people. What quality of people do you have in the room? How much value and fulfillment do they give to the founder/LP?

And the effective use of creative experiences for a VC community is what can lead to 100x returns.

Your mobility in the startup space is tied to the value that you can provide. Of course, money is a great value add, but a strategic check will trivially hold more weight than a regular check of the same amount to a startup. This is why it’s difficult to get on the cap table of tier 1 startups. VCs now need to show their value add beyond money. If the VC firm can help a startup break into new markets, recruit employees, or find new customers along with a check, etc, they’re more likely to get on the cap table. VCs that are creative and excel with their strategic add trivially get on better cap tables.

I think operations are such an underrated aspect of strong VC firms. Because of the hand-wavy / gray-area nature of VC firms, there are generally no operating procedures in place to collect data, train employees, and create internal systems that help the firm grow. VCs sit on a data gold mine in the number of companies they see and the information they receive. If systems are not in place to leverage the data they collect, firms can still succeed. You’d be surprised how far an Excel spreadsheet can go. But having strong operational workflows to collect data and extract insights can be a strong advantage over other firms. Especially, as the business world becomes more data and insight-driven, the importance of strong operations and systems to turn unstructured data into business insights actually becomes a key differentiator in the space. 

Hence, the rise of data science-driven firms like Ensemble VC and firms bringing on CTOs. Strong ops are generally nice to haves until you grow big enough that they become need-to-haves to unlock a new avenue of competitive edge in the space. 

After almost 1 year of working at a VC firm, it has come as a surprise to see the amount of creative practices within the space to succeed. 

However, at the end of the day,

Creativity in VC is only valuable if it helps you do 2 things:

Raise LP money.

Find/invest in good companies.