9 deals done and one lost because of Sequoia.
Statistics from our deal flow in 2023.
🖖 Welcome to Closing The Gap by JVH Ventures. After founding multiple companies, investing directly in 50+ startups and 10+ funds, we realized that a common understanding between founders, angels, and VCs is often missing.
We want to close this gap and combine perspectives from all sides.
Our goal is to look behind closed curtains and tell the honest truth.
Follow along to gain insights from all directions!
2023 is almost in the box. It surely was a special year that shook the venture capital scene worldwide. Here we want to give you an overview of what happened around our deal flow over the past 12 months.
In total, we looked into more than 700 deals, with approximately 2 new deals per day on average. This led us to close 9 new investments.
Seasonality of deal flow
First, let’s take a look at how the year developed over time.
Our strongest months have been June, September, and October. Generally, we observed that founders tried to postpone their fundraising at the beginning of the year and tried to wait for better macroeconomic climate (or appetite of VCs). Hence, we observed less deal flow for the better of Q1, which luckily increased later in 2023.
In addition, we launched some initiatives to increase our deal flow quantity and quality, which also reflect the increase in deals we saw over the course of the year.
Where did our deal flow come from?
Historically, we received most of our inflow from Germany, which also lead to 6 out of our 9 investments. In total, 78% of the deals we received came from Europe, leaving around 22% for the UK, USA and rest of the world.
Business model wise, we looked primarily into B2B topics, as this is somewhat our own heritage focus. Almost 50% of all deals we received came from the B2B field, leaving just 23% for pure B2C topics.
Regarding verticals, our top three industries were software (>60%), health (16%), and sustainable impact (15%). This also mirrors our strategic focus, as we focussed on b2b software investments.
Regarding the fundraising stages of the incoming companies, almost half of them raised their first round. Including second round fundraising, almost 90% of all deals fell into our sweet spot of early-stage investing.
This is also reflected by our deals done, with 6 deals being in the first two fundraising rounds (4 actually as initial investment).
Sharing for the win
Receiving warm introduction accounted for a bit more than 10% of the entire deal volume on average. For us, receiving deals is a stable factor throughout the year and main source of high quality deals. This is also reflected by the share of closed deals from warm introductions:
7 out of 9 startups we invested in came via warm introductions!
In turn, we also started to share deals in a structured way with our network. Our current distribution list features more than 100 investors! Here, we try to match the general preference of fellow investors by sharing both all (screened) deals that we receive or just the deals that we take a deeper look into.
With our (bi) weekly deal sharing email, we shared more than 350 deals! As far as we know, there were also more than 10 deals that happened due to our sharing.
If you want to join our deal sharing as well, feel free to sign up for our future Angel Community:
Last but not least, we compared the development of deal flow with made investments. Given the delay of the investment process here, our deals closed are somewhat correlating with the level of inflow.
Picking the cherries
Given our “fund-like” investment strategy, we aim to invest in startups that are able to deliver breakout returns. Hence, we increased our level of pickiness this year. Our investment rate this year was around 1% of all the investments that we saw.
To give you an impression of our funnel, most companies are sorted out prior to the first interview. Only <3% of the total deal flow made it to our second interview round and our short DD process:
Over the last years, almost all closed deals were coming via the network. This year, we actually closed 2 deals from cold outreach, which we attribute to our initiatives which we started to increase deal flow.
However, we are hugely grateful for our network and partners who actively shared great opportunities with us. Especially, we would like to thank Georg Schwarzkopf, Björn Loose, Moritz Zimmermann, Martin Rudigier, Tim Tepass, and of course also all other people sharing their deals with us!
In general, we observed that good deals are getting more competitive, with daring VC funds joining early (Pre) Seed rounds. So there might be a lot of caution amongst investors and actually a lot of difficulties for startups to raise money, but prospectively great deals are even harder to get into from our standpoint view.
Unfortunately, this year also featured us losing a deal for the very first time! After committing our ticket, apparently Sequoia knocked on the startup’s door and given the craziness of the current market, we lost our allocation. Interestingly, the founders chose another lead VC, though.
Working with new great founders
We are incredibly happy to partner up with a bunch of great founders this year!
This includes dbTune, SUMM AI, Unnbound, Mietz, Mate Studio, Shield AI, Forta Health, and two stealth investments.
If you want to learn more about our portfolio, check out our website.
Thank you for reading! If you liked, feel free to share it with someone else who could profit from it - angels, founders, VCs, anyone :)
PS: We are always happy to answer your questions or take on topics you want to hear about to close the gap! Just let us know.