How we Invest

How we Invest

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We invest in seed, pre-seed, and a select few idea stage companies. 

Many of our portfolio companies did not raise any capital prior to partnering with us. We love working and building companies together with founders.

We are generally focused on all things B2B/Enterprise on the infrastructure layers of the tech stack. We love founders working in enterprise computing: data infrastructure, collaboration, open source, privacy, security, automation, and fintech infrastructure space. 

However, we always keep our mind open to new ideas and we invest in founders who are passionate about changing how the world operates.

For early stage investments our typical first check size is $1M-$2M.

In addition, we will do follow-on investments in each sequential financing round for the company up to Series A.

We have a strong preference towards leading rounds. 

Having said that, if we really love what you are building, we will find a way to work together.

We take a high conviction approach to investing and happily continue following on for all of the founders we back. 

Part of our own investment rationale is we need to believe in the founding team so much that we will back you as your first investor, in the pre-seed round, in the seed round, in the Series-A, and potentially even beyond. Doing a startup is a long term commitment and we take our commitment as early investors seriously. 

It is never too early to reach out, we are interested in meeting with great founders even before anything has been built.

This is especially true for formation stage companies. We are happy to intersect with founders as the idea is being formed. We previously made investments before there was even a “company” to invest in. 

If we’re excited enough about you, we will help with all of the minute details of getting a startup off the ground.

Nope, we are also completely comfortable partnering with other great angels and investors.

Generally no, we focus almost exclusively on early stage companies.

We always evaluate companies from the perspective of the founder.

Our first meeting is typically a 30 minute Zoom call with the team to get an overview and most importantly ideally a demo (if there is one) of the product. If we are interested, afterwards we will schedule a second longer discussion and: 

  • Meet your team
  • Deep dive into the product and the technology stack
  • Talk strategies, go to market, competition
  • Talk to your customers, if possible 
  • Find how we can best help the company

If we are not interested we will quickly decline. We don’t like wasting founders’ valuable time. Even though we may not invest in your round, it does not mean we will not be helpful to you or work with you in the future.

Our own internal guiding principle for investment is to answer the question “Are we excited enough about your company that we would want to jump in and co-found the company with you?” If yes, we will find a way to work and partner with you. 

Starting a new company is a grind, we’ve been there and have done it before. While every founders’ story is unique, here are a few things we gravitate towards: 

  • Founder market fit – Deep personal conviction on why the founder(s) are working on solving the problem they chose + genuine insight on the market space they are in. 
  • Rate of Execution – Even if the company is very early, we love seeing continuous forward momentum towards the goals the founder(s) have set for the company.
  • Early signs (or a path) to traction – We love seeing early signs (or a clear path) of a small core group of defined users needing what the founder(s) are building. This is the method of finding out what we don’t know. If we figure out what we don’t know, we can solve it.
  • Market worth winning – The founder(s) should understand the market they are serving and the ultimate prize they are building towards. The product will most likely pivot and turn but the market should be more clear.

We believe the best founders are people that have very high conviction, are relentless in their effort, execution driven, adaptable, determined, and have a clear vision of the future. We love working with founders who share our level of dedication and passion towards creating a brighter future for many generations to come, working on companies that matter to humanity, and building companies we can tell future generations about.

A good sense of humor and a positive disposition is a huge plus.

While our core emphasis is on Silicon Valley and the United States market broadly, we will evaluate companies in all geographic locations.

Post-COVID, companies are becoming more decentralized than ever.

We prefer warm intros from people we already know and trust: Our portfolio founders and CEOs, our investor friends, our previous work network (BEA Systems, Sun Microsystems, Greylock Partners, 500 Startups, Siebel, Oracle, Autodesk, AT&T Wireless, Dolphin Browser, Startup Digest, etc).  

However, we are always open to direct outreach as well, especially from founders who are less networked or outside of Silicon Valley. You can email us at deals@race.capital  

We run Race Capital like a software company: We have a daily scrum with our internal team and apply the same rigor as founders use to build their companies.

Our team has collectively sold to every single major Fortune 500 company, we have had experience as a public company CEO, we have done major M&A transactions, and we have worked across every major functional area of a growing startup.

We’ve been there and done it before, and we want to help all of our founders achieve even more success and positive impact.

We want to be not just your investor, but also your coach, your confidant, and your sounding board. Here are our six promises to our founders: 

  1. We care deeply about our founders in all aspects, including: personal growth, drive, motivation, and success. 
  2. The founder’s job is a lonely road, so we will use our own experience and empathy to ease this journey.
  3. We will roll up our sleeves when asked, and we are happy to jump in to help when needed. 
  4. We will use our deep network within the enterprise domain to help with first POC’s, first sales, first hires, etc. We have many options on what works in the marketplace and what doesn’t. 
  5. We will give direct and candid feedback. We will tell you what you need to hear, not what you want to hear. 
  6. We will give you space. As a founder you have total freedom to build the company as you see fit; however, we are always here as your safety net.

It’s not required; however, if we collectively agree that we will add value by being part of the board, we have the experience and wherewithal to take on the responsibility.