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March 20, 2020

Village Capital Programs: Frequently Asked Questions

What is Village Capital’s track record with companies?

Over the past 10 years, Village Capital has directly worked with more than 1,100 founders in 28 countries and has led more than 100 programs. Through the Global Accelerator Learning Initiative, an independent and external ongoing study of program success, we are able to confidently pull data about our program’s success.

Compared to companies that do not participate in a Village Capital program (either because they were not selected or because they decided not to participate), companies that participate in Village Capital programs:

  • Raise 3x more capital
  • Earn 2.3x more revenue
  • Create 40% more jobs

What do you teach in your programs?

Our programs focus on investment readiness, helping founding teams focus on the most important next milestones that can unlock their growth. To do this, we developed a proprietary methodology called VIRAL (Venture Investment Readiness and Awareness Levels) designed by interviewing tens of thousands of entrepreneurs and investors to understand and translate the specific milestones an investor wants to see before making an investment. This framework is meant to help founders think more strategically about what to prioritize and understand the types of funding and partnerships to seek in order to level up their businesses.

VIRAL focuses on eight categories of business growth: team, problem and vision, value proposition, product, market, business model, scale, and investor exit. The goal of our workshops is to help founders move to the next level in each category, find the resources needed to do so, and receive feedback from peers and mentors on what they may be missing. 

You can take a self-assessment as an entrepreneur or an investor to get a sense of our framework live on Abaca.

Each program may have variations on the specific sessions or takeaways from their programs depending on the stage of the cohort, sector, or length of the program. Regardless, each founder should leave our program with:

  • Actionable guidance for their next strategic decision
  • Insights into their risks, blindspots, and concerns that other investors may raise, and a specific plan to mitigate those risks
  • Strong connections to industry leaders, sector-specific investors, and potential partners or acquirers
  • An improved investor pitch deck, investment brief, financial model and/or cap table plan, as well as assistance with messaging

What is peer due diligence?

Throughout a Village Capital program, founders spend a significant portion of their time learning from each other. As a philosophy, we believe that the decision making power should be in the hands of entrepreneurs, and that founders are in the best position to provide critical feedback to other founders because they’re working through the same questions themselves. 

By the end of each program, we want every member of the cohort to better understand their own companies’ strengths, risks, potential, and blindspots by learning how to conduct diligence like an early stage investor and how to address questions investors will ask them in the future.

How does peer due diligence work?

On a tactical level, peer due diligence takes form in a few different ways:

  • The Peer Due Diligence Criteria is a set of questions and concepts based on the VIRAL framework. We teach founders how to assess a venture based on this criteria, which we built from interviewing and collecting data from hundreds of investors. Peer One-On-Ones occur almost daily during in-person workshops. We break down each VIRAL category and pair founders with one another to deep dive on two or three topics at a time to assess the strengths and risks of each category. Founders gain insight into how other founders perceive their business and what key risks they may be overlooking. 
  • Peer feedback happens throughout the program. Whether a session is about building a team or strategizing an eventual exit, founders are pushed to think about the assumptions they’ve made and if or when to challenge those assumptions. 
  • Peer selection occurs at the end of each program. After hours of diligence and feedback (on average 100+ hours per program), founders use the Peer Due Diligence Criteria to assess each other. By assigning a confidence score to each question,  founders are collectively deciding which companies they are most confident in investing in at that time. Typically the two companies with the highest scores from their peers are selected for investment.

What if I go through the whole process and I’m not peer selected?

If we’ve done our job, the selection at the end of the program is just one of the ways companies benefit from our programs. Here are a few others our companies have shared: 

  • Better understanding of the amount and type of capital they should raise
  • A strategy shift or pivot based on insights from other peers or mentors
  • Self-awareness of the founding team’s motivations and ultimate goals for the company
  • Introductions to networks of new investors who often invest in our alumni post program
  • A strategic framework to guide future decisions and get other team members aligned
  • A conversational framework to guide discussion with future investors
  • A formal partnership, new customers, sales channel, or future acquirer
  • A new pitch deck, financial model, or cap table model from our Investment Analysts
  • Introductions to industry experts and sector leads from our Practice Managers

Aside from the above, participants on average go on to raise 3x more capital, generate 2x more investment, and grow their companies 50% faster than nonparticipants. Our programs are designed to connect you, as a founder, directly to the resources you need for your business to grow and be around for the long term.

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