The Vertical VC: Why a Specialized VC is the Best Partner for Entrepreneurs


labs.openviewpartners.comImagine that you’re entering a race and could choose any car. You’d probably pick the fastest sports car you could find. But what if I told you it was a drag race? Or the 24 Hours of Le Mans? Or something off-road in mountainous terrain? Each would require a unique vehicle and a driver with a specific skill set. And if you chose the wrong car for the wrong type of race, your chances of winning would diminish significantly.

For entrepreneurs selecting a VC, the same should be kept in mind.

While many founders view VCs as vendors of the same generic “product,” the reality is that the very best VCs differentiate themselves by delivering much more than capital. For instance, many firms boast robust networks that can open doors to new customers, strategic partners, or M&A; targets, while other firms provide more hands-on operational help with internal consulting teams. But, that endorsement comes with one very big caveat: Unless a VC’s support services are sharply aligned with the business they’re helping, they’re mostly meaningless.





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