The COVID Acceleration of Our New (Venture) World
Are we being transformed? Or are we just simply “speeding up”?
The “Unthinkable” of Vaccine Development
Traditionally, vaccine development is a long, complex process, often lasting 10–15 years and involving a combination of public and private involvement. Introduce COVID-19, and in an unprecedented (and inevitable) manner, the U.S. Department of Health & Human Services (HHS) started a program they coined “Operation Warp Speed,” (OWS) in an attempt to expedite a COVID-19 vaccine. By mid-summer (yes, 4–5 months later), Moderna and Pfizer had established themselves as the leaders in the race to develop a COVID-19 vaccine, publishing initial Phase I/II clinical trial data in mid July and mid August respectively.
Acceleration of “Everything”
If the “unthinkable” could happen for the vaccine industry, the COVID-19 crisis brought about years of change to a sharper focus in the way companies do business. With the concepts on “social distancing” and “contactless” ongoing till today and for the foreseeable future to come, any lingering doubts about the necessity of digital transformation, the pandemic has silenced them once and for all. Business dealings and transactions are being done over online and virtual environments, made possible by the likes of Zoom and Slack while FinTech adoptions are going through the roof due to the overwhelming need for flexibility in payments. Don’t get me wrong, the digital mandate isn’t a brand new concept — the pandemic has simply accelerated the paradigm. And as consumers consume more and more digitally, there will be that subliminal expectation that everything needs to done, served, executed quickly and seamlessly, and yes that would be expected for ALL sectors and regions.
Acceleration in the World of Venture
I have been really lucky to be able to ply my trade in the world of venture for the past couple of years and based on my observations, investors such as angel investors, venture capital firms, family offices are really important stakeholders as they are the prime enablers of up and coming startups that more often than not, bring about disruptive, next-big-thing technology and new business models to different industries. However, most investors on their own, do not have the resources and expertise to embrace digital transformation and adoption. It is a common sight for them to use existing softwares such as excel or google sheets while more progressive firms will use expensive solutions which unfortunately, usually only targets specific functions (such as CRM, workflow management etc) in their entire business processes. It is to note that a few decades ago, investors were given the luxury of time, at times spending more than 3 months on analysis of term sheets and due diligence processes. In this age, it can be observed that the time gap for investors to make their investment decisions is becoming shorter — in fact, I would not be surprised at all if that time gap is reduced from an average of 3 months, to 30 days, to 30 minutes, to 3 minutes, all the way to mere seconds in the near future. Without the use of a technological platform that can do everything an investor needs from A-Z in the venture world, it would be near impossible to embrace or keep up with such an “accelerated” norm.
Venture Capital 3.0
Research by Hatcher+ and Institutional Investor (INSEAD) shows large venture portfolios ( > 500 investments ) reliably deliver a higher number of power curve effects, resulting in stronger, more predictable returns. Many investors are starting to realise this fact — however, they face limitations as their current technology capabilities restrict/prevent them from radically increasing their portfolio size, which will require a lot more (expensive) headcounts to manage. Additionally, investors are acknowledging that they do not index invest because they are picky, not because they have so many options but because they have too few (lack of quality deal flow).
Hatcher+ VAAST™ (Venture-as-a-Service Technology)
How can this be solved? Introducing the Hatcher+ VAAST™ (Venture-as-a-Service Technology) platform, the world’s most advanced venture as a service technology platform — VAAST enables AI-assisted analysis of partner program applications, management of tasks and teams, data analysis, and stakeholder reporting, via a custom-branded interface. Incidentally, the platform is white-label ready, integrated with 26 leading APIs and supports 18 languages and 50 currencies.
Hatcher+ partners with leading generalist and specialist accelerators and seed stage VCs. These partners provide access to up to 30,000 new startup investments annually — 30x the deal flow of traditional VCs! Other key features include:
i) enabling partners to identify new emerging business opportunities using AI and natural language processing-based algorithms and search for specific business types using the VAAST Deal Scout module;
ii) includes individual data profiles for startups, cap tables, fundraising campaign management, KPI tracking, and secure data rooms;
iii) enables partners to create and manage deal flow and portfolios, automate daily operations (including in-house accelerators), and generate comprehensive stakeholder reports.
Hatcher+ also partners with leading fund managers, fund administrators and service providers worldwide, and can introduce investors to a range of tax-efficient investment structures through these partnerships. *Bespoke VCC sub-funds can typically be set up within days at nominal cost (yes within days as compared to months currently experienced), and structured to share carry, if required, with co-managers or advisors. Exchange-tradable structures are also supported.
On the side note, I can connect you with our Investor Relations team and they can share with you the collection, validation, modelling, and forecasting methodologies used to construct, back-test, and inform a novel approach to large-scale venture investment — these findings were considered in the process of determining the investment strategy for the H2 Fund LP.
The new norm is here (yes, already)
Yes — even for the venture industry, digital transformation (minimally digital adoption) is more necessary during this crisis, not less as new opportunities could be both boon and bane which investment firms need to face with greater urgency, even if it means overhauling the entire strategic vision and one’s mindset. While it took many years and resources (more than USD10M) for us to research and innovate, collaboration with the right partners will definitely cut short the amount of friction and ease the monumental task of coping with the accelerating changes in the world of venture. In the near future — VC 3.0 — all participants — GPs, LPs/investors, company founders, vendors, and syndicate operators will thrive within a connected, intelligent marketplace where investments more precisely match investor mandates and portfolios are build using quantitative, data-driven strategies. With the right (Hatcher+) approach, we can all come out of the fray stronger, more agile, and more customer-centric than before.
About Hatcher+
Headquartered in Singapore, Hatcher+ is a global data-driven early-stage venture firm. We have analyzed over 600,000 VC transactions and constructed over 4 billion virtual VC portfolios to explore the return profiles of various strategies. The insights have led us to build a data-driven approach to venture investing that delivers robust, predictable returns, global deal flows and co-investment opportunities.
