Connection.
Community.
Capital.


At SquareCircle Ventures (SCV), we use connection, community and capital to develop and grow viable companies led by underrepresented entrepreneurs.

We think now is always a good time to get started!

It’s never too early to reach out. We don’t see divisions between angel, seed, pre-seed, and growth rounds — we’re interested across the board and find that founders’ needs are the same early on. In fact experience has taught us that deficiencies in other aspects of a businesses' development are usually the culprit for any stagnancy in the business. We are here for when you are just a couple people and an idea, having never raised capital before? Or you have a business that works, but you can’t find the capital to grow. So, even if you don’t think you’re ready, we’d still like to get to know you. Maybe we can even help in the meantime. Just click Get Started!

Originally published 10/30/21

Of course not. While we’d like to be the first money in, we target communities where friends and family rounds don’t generally exist. To that end, creating more knowledgeable investors from underrepresented communities and reducing their risk, strengthens the overall ecosystem. In fact we want Angels from other communities to help us create more ‘Angels’ and accredited investors in underrepresented communities. Just connect. We are sure we can help each other get better.

Originally published 10/30/21

Yes. We are trying to empower underrepresented communities. We are out to prove that creating diversity in your cap table, workforce and C-Suite will increase your bottomline exponentially. Working with a company pre-IPO or pre-profitable acquisition creates more knowledgeable and accredited investors in underrepresented communities and creates more opportunities to uncover markets that you did not even know existed.

Originally published 10/30/21

How We Make Decisions

No. We don’t think VCs, Private Equity, MBAs or Consultants predict the future – founders and entrepreneurs do. And we look to founders and entrepreneurs to teach us what’s next. We are constantly connecting with Angels, advisors and collaborators that have ‘operational expertise,’ in a variety of industries. That usually means they are your entrepreneurial peers looking for that next challenge covering a wide range of thoughts and disciplines and therefore able to support any industry our founders and entrepreneurs can dream of. If you’re building something different, we want to hear from you and learn about the vision of the future you have in mind.

Originally published 10/30/21

Of course not. In many of the underrepresented communities that we serve, there are many well run companies that just need capital, market access and a modernization plan. They have survived for a long time, managing debt and not able to attack markets that are fertile for their products or services. We examine the market potential, product fit and work with our partner ecosystem to maximize the potential of these undervalued companies.

Edited 11/07/21

The biggest factor in our decision-making is always the founding or managing team. How innovative, resourceful and resilient are you? What’s your superpower? Why are you going to be the ones to prevail where others won’t? What in your history shows that you thrive off the beaten path? Of course, we evaluate product and market too, but to be honest, we mostly look at that to evaluate the strength of founders too. Looking at what you’ve done already for this company — and before in your career — gives us a record of hundreds if not thousands of decisions you’ve made to get you where you are today. And that’s what success lives or dies on in this industry: the ability for founders to make really quick, good decisions. We want to understand how you do it, and we give that a lot of weight.

Originally published 10/30/21

Above all, we look for compelling and contrarian insight into how the world works. What do you understand about a market or a need that no one else does — that other companies in the space get wrong? And why is your company the most likely to win at addressing this gap?

Second, if you have a product in market, having a small group of passionate early customers is a strong indicator for us. If there are people using your product or service who wouldn’t know what to do without you, we want to hear about it. That’s one of the strongest data points you can offer. As an extension of this, we want to see creative thinking around go-to-market strategy as well as product. The best startups take both seriously.

Third, we take a close look at the market you’re going after. Let’s say you win the whole thing. Is the prize worth winning? The game is long and hard, and some markets are more rewarding than others. SaaS companies have a different range of opportunities than on-premise software makers. First-party retailers are valued very differently from third-party ecommerce sites. To mix our metaphors, before a founder starts building their castle, they have to make sure they’ve picked the right piece of land.

Originally published 10/30/21

Building an enduring company is ridiculously hard. You have to overcome inertia, have an unbelievable amount of conviction, and be willing to drive through brick walls. You can’t wait for someone to hand you a roadmap. You can’t even wait for a roadmap to come into focus. You have to be able to draw it yourself and execute at the same time. This is an exceedingly rare set of skills — and it’s what we seek to find in every founder conversation we have.

That’s number one. Then there’s all the typical stuff: integrity, credibility, market understanding, learning ability, etc. But there are a few other things we haven’t seen written about or discussed to death that end up mattering a lot:

  1. Delayed gratification. Being a founder is a constant, gruelling exercise in deferring happiness and victory. The most successful entrepreneurs are willing to sacrifice in the short term for long term impact. When we consider working with you as a founder, we look for your willingness to make these tradeoffs earlier in your life and career. Did you skip spring break to pursue a long-term project? Did you work while you were in school? Have you built anything that took months in heads-down crunch mode to make possible?
  2. Admit unknowns. We’re always meeting the same two types of entrepreneurs. The first thinks they’re expected to know the answer to every question. So they’ll make sure they have a definitive response always, even if they shouldn’t. They’ll tell us their pricing model. Why they’ll be competitive with Google. What will cause customer churn in three years. Whenever we try to address potential risks, they tell us they don’t exist. This is not our ideal type of founder. The second type of entrepreneur will answer questions when they can, but when they don’t know, they say so. When asked the same question about pricing, they might say, “Well, we’re considering a few different options depending on the outcome of some tests we’re running.” When asked about the cost of customer acquisition, their response could be, “We don’t know what our numbers will be, but here’s our model based on comparable companies.” When asked about the risks, they identify several — and engage us in discussion about how to handle them. The founder who volunteers their ignorance has far more credibility. No one expects a pre-launch company to have all the answers. In fact, it’s a red flag if you think you do. Don’t sell us on being 100% correct. We’d much rather understand how you’re attacking the market, evaluating the risks, and taking on unknowns.
  3. Good storytelling. All successful founders can deliver a compelling narrative. They have to be able to sell against the status quo. They have to convince investors and employees that this incredibly unlikely thing they’re doing is about to take the world by storm. They have to capture media attention, keep their board aligned and energized, and consistently bring new customers into the fold. If a founder can’t tell an amazing story, it’ll be hard for them to do any of this.  If you’re interested in developing these skills, be sure to read The Seven Deadly Sins of Startup Storytelling, Transform the Way You Give Presentations and How to Tell a Story When Raising Capital.
  4. Founder-market fit. We’ve lost a ton of money betting on seasoned enterprise founders pursuing consumer ideas, and vice versa. This doesn’t mean that our decision pivots on domain expertise — it means that a key part of our process will be determining whether a founder is capable of succeeding in the field they’re headed into. We need to hear a good argument.
  5. Rate of execution. Great founders move very, very fast. So if we meet with an entrepreneur over six weeks, we’re watching closely what they’re accomplishing at the same time. If the company’s been around for 90 days or 6 months, we want to see how much they’ve gotten done in that period. There are a ton of leading indicators there. We want to work with companies and founders that make great speed a habit.

Originally published 10/30/21

Yes! We are virtual, online across the country. But because of regulatory constraints we can only leverage community resources in BC, AB, SK, MB, ON, QC, NB and NS. Our Accredited partners don’t have such restrictions and by creatively using M&A strategies in individual provinces; we believe we can overcome the $1.5 million cap per 12 month period if necessary, that the securities regulatory authorities restrict to raise online without a prospectus.

As members of the National Angel Capital Organization (NACO) we will participate in the Startup VISA program.

Originally published 10/30/21

Investment Process

These answers vary from company to company, but there are some basic steps everyone goes through. While we often try to move at the pace of the founder, an important rule applies: the less time we have to make a decision, the more conviction we have to feel about a company. Sometimes we spend months through SCVLabs developing a relationship (which, honestly, we prefer). Sometimes we move from intro to close in under a week. Generally speaking, here’s what you can expect:

  1. Initial meeting: In advance of an initial meeting, we’ll look at any materials sent by the founder, determine whether the business fits our basic investment criteria, and try to ensure it’s not directly competitive with any of our existing investments. Your first meeting (or phone call) with a member of the investment team will typically be between 45 minutes and an hour. We let the founder do most of the talking, and hope they use the opportunity to dig into the specifics of their team and business.
  2. Second meeting: Most of our “passes” occur after the initial meeting.  If you’ve made it past that meeting, you’ll spend more time with your SCV point partner as we both continue to learn more about each other. This is our chance to focus in on particular areas of the business where we have questions — and for founders to ask us more about SCV, what working with us is like, and what they could expect as a member of our community.
  3. Follow-up: Our partnership makes all decisions as a team. So, we often introduce promising founders to another SCV partner for an additional conversation. We often like to introduce the founder to the partner who has the “most skepticism” about the company at this point – as it ensures that all questions are addressed and gives us the ability to probe more deeply into the core assumptions of the business for an hour.
  4. Partner meeting: If these conversations go well for both of us, we’ll typically make some reference/diligence calls and invite you to meet with the rest of the partners at our twice-weekly investment meeting. Here, you’ll have about an hour to tell your story to the entire partnership and answer questions. Typically, we fund about half of the companies that make it to our partner meeting.
  5. Final Decision: After your presentation, our partnership will discuss your company in great detail with the goal to give you a final answer usually within 24 hours of the meeting.

You can see more about our terms and how deal specifics usually work below.

Originally published 10/30/21

Ideas are easy to describe on paper. People are not. That’s why we’ve historically valued referrals from people we know and trust. This includes people leading and employed by SCV companies, angel investors, other entrepreneurs, etc. It gives us more data to work with.

But we know good ideas can come from anywhere, and there’s plenty of incredible founders out there — particularly those from underrepresented backgrounds— who lack these inroads. With that in mind, we’ve created SCVLabs our incubator, accelerator ecosystem. Where through magic of technology, capital and community. We establish meaningful connections with companies and capital that spawn new ventures and create career opportunities. We help demystify the future of work and entrepreneurship through curated market intelligence, inspirational storytelling and structured community driven, peer mentorship. Where you can also submit an investment opportunity for our team to review. Apply here to be considered. We’ve structured it where it’s the equivalent to the cost of a lunch but gives us you on-going access to a wealth of advisors, peers and documents that will help you find the right resources to pursue your business even if we are not the perfect fit.

Originally published 10/30/21

Yes. But not for the next two quarters spanning 4th quarter 2021 and 1st quarter 2022. We are already working with partners in the USA, Caribbean and Africa but we are focused on establishing operations in Canada tentatively until March 2022. We are introducing a new way for underrepresented communities to participate in the development of their communities and every state and province has unique rules in protecting their constituencies. We have to make sure our software engineering efforts supports such a dynamic rollout and will assist us in adhering to the local rules.

Originally published 10/30/21

While our partners have different and diverse interest areas, we’re extremely collegial in how we work. We often evaluate investment opportunities as a group and frequently hand off companies to the partner who has the most experience in the space (or is located in the right geography).  The investment team constantly talks about everything they’re seeing and what they find interesting. So don’t hesitate to get in touch with your closest connection to get the ball rolling.

Originally published 10/30/21

Terms

Our initial investment in a startup ranges will range from $125k through SCVLabs to $4 million, but we are willing to go higher or lower in some cases. Currently, we project our average initial investment at right around $1.5 million. We intend to be the largest seed-stage venture fund in the country focused on underrepresented founders and entrepreneurs, we’re very serious about supporting our companies with follow-on investing. In fact, we reserve equal amounts of capital for our follow-on investment as our initial investment.

Originally published 10/30/21

We will evaluate established companies on a case by case basis. We will look to see if they have accessed all profitable markets, their current debt structure and their capacity for growth?

Originally published 11/30/21

No. Unlike some traditional venture funds who need 20 to 25% ownership requirements, we don’t. We like to own enough of the company to make sure that we can dedicate meaningful time and resources to helping you build. Not to mention in our model we represent the interests of underrepresented stakeholders and investors and at the outset look to ensure that your vision is matched with the community you aim to support. That said, our ideal ownership is roughly 15% after your seed round.

Originally published 10/30/21

No round is too small for us to invest. The average size might be $1.5 million, but we’ll invest in rounds as small as $100,000 and as large as $5 million. Regardless of check size, you get the same SCV experience.

Originally published 10/30/21

While we intend to lead most of the time, we are designed to partner with outstanding seed-stage VCs, angels and private equity firms. The most important thing (to us), is that we’re aligned with founders, entrepreneurs and have a meaningful stake in every company (so we can spend meaningful time trying to help the company win).

We’ve found it’s in a startup’s best interest to have an active lead investor. We’re allergic to party rounds. In our experience, it’s in a founder’s worst interest to have a group of investors without a leader. For more advice on this, check out our article on Series A fundraising. When we lead an investment, we’re there for the founder, and ready to roll up our sleeves to help them get the job done.

Originally published 10/30/21

No. "If you think you have something super secret that no one else should know, don't tell us about it." We are constantly discussing business ideas with partners, founders and the ecosystem at large. Signing an NDA can result in the process becoming about navigating the NDA as opposed to working through the ideas. At the end of the day, "the value is in creating the thing, not simply having the idea." We think Brad Feld does a great job explaining this in his blog post, Why Most VC’s Don’t Sign NDAs.

Edited 11/07/21

What's it's Like to Work With Us?

We’re focused on being the world’s best partner for underrepresented founders, entrepreneurs and companies at the very first stages of company creation to our founder’s ultimate vision of success — so we’ve designed the firm to do just that. When you work with SCV, you get super active partners working side-by-side with you on your biggest and smallest challenges. Whether it’s setting strategy for a fundraise or thinking through your organizational design, we’re in your corner through the thick and thin of company building over those first few critical years.

On top of that, you get access to our Platform Team, working to help you fast forward through the tough nitty-gritty of building a company so you can focus on what makes yours special. Whether it’s our Pitch Assist Team building your Series A deck, or our Talent Team connecting you with top-tier candidates, we’re here to help across all your needs.

Most importantly, we pioneered the concept of transforming a portfolio into an ecosystem, a peer mentor community that we are calling SCVLabs. Many of our partners are entrepreneurs themselves, the most valuable advice and support they ever received came from other founders and entrepreneurs. That’s why we provide the tools and forums you need for employees throughout your company to learn from and help their peers. If you’re a PM, a CFO or a junior marketer, you can benefit from the collective wisdom of many others. For more on how we do this and the services we offer, check out our Philosophy page.

Originally published 10/30/21

We are always networking with top tier Accredited Investors, Angels and VCs that want to participate with underrepresented communities. We created SCVLabs, an online ecosystem to enable aspiring retail investors in underrepresented communities to learn about opportunities, founders, entrepreneurs and businesses that they can support in their communities. We are creating mSUSU™ so that they can invest with a regulated entity and ensure there is no illicit activity. We curate and package these opportunities use a mix of community support and operational expertise to mitigate risk and create alternate liquidity events to support community needs.

These learnings are an integral part of our Pitch Assist program, developed to help companies get through what’s undoubtedly the toughest part of starting something new. Every engagement starts with strategy meeting with our partnership. We figure out which VCs founding teams should pitch and in what order based on our experience with almost every tier one investor in the country.

Once a coherent strategy is set, we pair entrepreneurs with a dedicated designer and content expert for a 4-6 week boot camp. They come out the other side with a finalized fundraising plan, a compelling narrative, a gorgeous presentation (built in-house here at SCV) and a bulletproof story that showcases their unique value prop. SCV founders also get tons of rehearsal time with our entire partnership to make sure they nail their presentations right out of the gate.

Originally published 10/30/21

As an early-stage founder, the future is always hard to predict. You’re assessing the potential for big product bets, impact of new hires, shifts in go-to-market strategy and hundreds of other items large and small. Today, the COVID-19 health crisis and uncertain economic outlook makes these types of predictions even more difficult. But we believe that founders shouldn’t have to try to predict how (and whether) their existing investors will support them in the next round. We think that consistency and transparency is paramount — particularly when things get tough.

As we are pioneering equity crowdfunding as a tool economic development in underrepresented communities we will undoubtedly get better at using it and our partners to fund our founders in the future.

Given the uncertainty in today’s market, we’ve decided to explicitly state how we will participate in the second round going forward. That’s why we’re now creating the “Second Round Guarantee.” Our aim is to bring a bit of clarity to this often murky question founders face. Here’s how it works: When we lead your first round (whether it’s a pre-seed, mango seed, small Series A or anything in between), we’ll be there for you in your second. More specifically, we guarantee that we will always take our pro rata in your next outside-led venture round, with a commitment of up to $3M. If the Series A round is over $20M, we may not take our full pro rata, but will invest at least $3M.

Originally published: 10/30/21

We are committed to a safe work environment in which no member of our ecosystem community is discriminated against on the basis of sexual orientation, race, religion, age, nationality, gender identity or any other characteristic protected by applicable law. We will promptly take appropriate remedial action to address any form of harassment or discrimination that is brought to our attention. We will also address any reported claims of retaliation to ensure a comfortable and productive work environment for all those who work with our team. To confidentially report any incident involving a SCV employee, please contact legal [at] squarecircle [dot] vc.

Originally added: 10/30/21

It’s said that successful founders should spend over 50% of their time on hiring during growth periods. We actually think this is an understatement. But we also know devoting this many hours while running a company can seem impossible.

That’s why we have a small, focused team to help share the load. And our partners will always pick up the phone to help close candidates (they have a pretty astonishing batting average). Our Talent Team works side-by-side with our earliest-stage companies to help them jumpstart their hiring process. Their work sourcing candidates and making introductions is complemented by our rich, proprietary dataset on compensation so that you can make the smartest offers. Leveraging data we will collect from SCVLabs we’ll be able to put together best practice guides — essentially manuals written by veteran entrepreneurs — all in service of giving founders a head start on hiring.

Originally published 10/30/21

Many early-stage founders don’t come in with an innate sense of how they’ll acquire customers. They might know the usual levers to pull and experiments to run, but every company is different — and sometimes very different if they’re working in a new industry or domain. Whether you’re a consumer company trying to nail early paid marketing or an enterprise company crafting its go-to-market strategy, the best way to get up to speed fast is the same: learn from folks who have been there before.

In addition to being entrepreneurs themselves, our partners have worked with hundreds of founders on their early growth and customer acquisition plans and experiments. We’ve seen every type of company, sector and tactic — and we make a point of sharing all we know (and lessons hard won by our other companies) in working sessions between partners and founders, often every other week.

If we don’t have the answer, we know someone else who will. It’s our job to make it easy to find. The SCV Network including SCVLabs allows our entire community (everyone at all of our companies) to candidly air their worries and problems, ask questions, present their problems, and help others with what they’ve learned. Most questions asked on Network are answered within 24 hours, giving people a nearly real-time resource whenever they hit a wall. Many of the questions focus on customer acquisition and growth, how to evaluate the costs involved, what has already worked for others, and pathways through scaling.

Lastly, we have a real-world database of hundreds of experts across functional areas who we can connect to our companies to provide custom, focused advice based on the exact situation. Hailing from incredible careers at companies inside and outside the SCV portfolio, these folks have told us what they know in granular detail so we can match them very specifically to the right problem-solving opportunities — all on demand. So whether a startup needs to know how to restructure its sales team, which A/B test to run on its landing page, or how to calculate its CAC and LTV, we can set them up for a call, coffee or meeting that will neutralize the problem and slingshot them forward, fast.

Growth isn’t something that just happens. It’s a slog. It’s hacking through the jungle and traversing the frontier without a map. Every single time. When that’s the reality in front of you, all you can ask for are the best guides — and we’ve got you covered.

Originally published 10/30/21

Yes, we do in most cases. Mainly because we represent the hard earned money of folks within underrepresented communities. What’s consistent is that we’ll be extremely active helping you build your company.

Outside of board meetings, we prefer what we call “working sessions.” Every 4 to 6 weeks, we go deep with a founder on a big challenge. We’ll spend the entire meeting working through the problem, and we’ve found this type of collaboration far more valuable than traditional reporting and governance. That said, we know how to operate and make an impact in more formal meetings too. (And, by the by, if you’re looking for board meeting best practices, check out this piece from one of the best board wranglers we know.)

Originally published 10/30/21

Basics

No. Not currently. But this will undoubtedly change.

Originally published 11/03/21

We pick our investors very carefully. It’s important to us that we generate returns for shareholders we can be proud of and who share our values.

mSUSU™ our equity crowdfunding platform will provide 50% of our funding directly from the communities it serves.

Our first investor, Kalina Food Trading Company (KFTC) is actually a company that we’ve worked with to generate a number of pilot projects to help in their customer acquisition, talent development and fundraising. As the transaction fees from these pilot projects came in KFTC saw the efficacy in supporting a mutually beneficial platform for economic independence in the underserved communities we target.

We look forward to adding investors that align with our philosophy.

Originally published 10/30/21

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