How much do you usually invest in a new company?
Typically, our initial investment in a startup ranges from $750k to $4 million, but we’ve gone higher and lower in some cases. Currently, our average initial investment is right around $2 million. We’re also very serious about supporting our companies with follow-on investing. In fact, we reserve equal amounts of capital for our follow-on investment as our initial investment.
Do you have a strict ownership requirements?
No. Unlike some traditional venture funds who need 20 to 25% ownership requirements, we don’t. We like to own enough of the company to make sure that we can dedicate meaningful time and resources to helping you build. Our ideal ownership is roughly 15% after your seed round.
What size rounds does Olam Capital participate in?
No round is too small for us to invest. The average size might be $1.5 million, but we’ve invested in rounds as small as $100,000 and as large as $5 million. Regardless of check size, you get the same Olam Capital experience.
Will Olam Capital only invest if it can lead the round?
While we tend to lead most of the time, we’re not the lead investor about ⅓ of the time. The most important thing (to us), is that we’re aligned with founders and have a meaningful stake in every company (so we can spend meaningful time trying to help the company win).
We’ve found it’s in a startup’s best interest to have an active lead investor. We’re allergic to party rounds. In our experience, it’s in a founder’s worst interest to have a group of investors without a leader. When we lead an investment, we’re there for the founder, and ready to roll up our sleeves to help them get the job done.
Will you sign my confidentiality agreement / NDA?
No. We’d explain why in detail here, but we think Brad Feld does a great job in his blog post, Why Most VC’s Don’t Sign NDAs.