Portfolio News
May 7, 2024

The People Centric Lens: Identifying the Top 1% at Pre-seed

Loading the Elevenlabs AudioNative Player...

At Concept Ventures, we're obsessed with one problem: Identifying the top 1% of founders who possess the potential to build legendary companies, before it’s obvious to others.

This is the question when investing at Pre-Seed and something we think about daily.

The Traditional Approach

‘Gut-feel’ approaches to analysing founder potential have become the standard approach within the VC space. Whilst we fully acknowledge the challenges of investing (often) pre-metrics, traction and product, we believe basing decisions purely on a hunch, impression or assumption, is wrong. Instead, we bring analytical rigour, standardised assessments and repeatability to this process.

As such, we believe the answer to how one might identify the top 1% lies in having an obsessive people-centric investment approach. Tomorrow's unicorn founders already bear the hallmarks of success, if you know how and where to look.

Founders are nearly always the consistent elements behind a successful investment - this much everybody knows and goes far beyond Founder-Market fit. Take Stewart Butterfield, co-founder of Slack as a prime example. 

The Story of Slack

Calculated or not, having pivoted the once-upon-a-time games company Slack to the communications channel we know today - is one of the most poignant examples of an investment where founder conviction drove it home - and not just once, but twice. Butterfield’s original business, Flickr, began as a games company which eventually pivoted into an online image-sharing site acquired by Yahoo for $35m. Once he’d tended to his Alpacas, he returned to the entrepreneurial journey and raised $1.5m from Accel Partners and Andreessen Horowitz for his next attempt at a games studio - which later became Slack (sold for $27.7bn to Salesforce). 

What was it that led to Slack’s multi-billion dollar success story? Was it his Masters in Philosophy from Cambridge? Or his 3 years spent at Yahoo? Likely not, and no successful startup is ever an ‘up and to the right’ only story.

Stewart’s working career was a display of resilience and dexterity. His games company Tiny Speck (Glitch) for which he originally raised, failed to achieve commercial success - but ever the opportunist, Stewart spun out some of the tooling they built internally, which was later to become Slack Technologies. 

When you dive deeper and understand the origins of great entrepreneurs, you begin to see common threads and attributes - and how they face & overcome challenges. Looking back, much of this may seem obvious, but if you are waiting for a founder to be a ‘repeat entrepreneur’ in today's market you may be far too late. 

The top founding teams of tomorrow will all share common attributes with the likes of Stewart Butterfield, Elon Musk, Melanie Perkins, and many others. We’ve spent the past 6+ years decoding these characteristics. We continue to uncover the root causes and influencing factors behind entrepreneurial success - building conviction in the people, long before anyone else does. 

Our investment philosophy centres around deeply understanding founders as human beings first - their backgrounds, personalities, motivations, and the fundamental traits that set them apart. We've developed a framework that allows us to decode the raw human potential behind each founder.

What if you could truly understand who a founder is at their core? What drives them? How they think? How they'll perform under pressure? 

Our unique diligence process leverages personality assessments, behavioural analysis tools, and evidence-based research to paint a vivid picture of each founder's DNA.

We don't just evaluate logos, resumes and metrics. We go back to what matters most - the people, peeling back the layers to reveal the intangible qualities that transform visionaries into industry titans. Our multidimensional founder profiles uncover natural strengths, working styles, abilities to pivot, blindspots and team dynamics - and thanks to 5 years of in-house data, we can begin to match teams, both quantitatively and qualitatively, to our internal and proprietary founder archetypes.

Looking towards our own portfolio, we identified the co-founders of ElevenLabs as a “Humble Visionary” and a “Seasoned Technician”. Watch this space for our upcoming deep dive on what we saw in Mati and Piotr at pre-seed.

At Concept, we're on our way to becoming ‘people experts’, using insights from psychologists, founder archives, body language experts, academic researchers, and our own investment experience to decode what drives stellar founder performance across different verticals and business models such as DeepTech, Consumer, FinTech, Marketplaces, and more.

Team Dynamics

A founder's strengths are just one piece of the puzzle. Our people-centric lens allows us to make assessments around founder <>  role suitability, leadership potential and founding team chemistry. We evaluate how each founder's unique traits, working styles, and potential blindspots could interplay within the team dynamic. Our aim? To predict whether a team's composition will allow the founders to amplify each other's strengths or identify potential gaps that need to be addressed. We understand that legendary companies aren't built by sole visionaries, but by finely tuned, high-performing teams. That's why mapping the interpersonal dynamics is a critical part of our people-centric diligence process.

Our Edge

Heavily weighting investment rationale on the founding team is most relevant at our stage and is what gives us our edge, allowing us to identify promising founders and teams that others overlook due to ‘classic’ perceived issues like a small market size and TAM problems.

The bottom line is - when you truly understand founders as individuals, pre-seed bets become less speculative and far more considered.

If you believe you’re part of the top 1%, we can’t wait to hear from you