In 2009, H/L Ventures was one of the early pioneers of the venture studio model, launching what we now call H/L Studio as our first strategy. From inception, our team believed that taking an active role in co-building our portfolio companies – far beyond simple funding – would be crucial at any stage. Many venture firms speak of having a studio or value-added services, but to truly deliver the rarest form of venture capital – consistent support to all portfolio companies – requires the right structure. We partner with founders to create extraordinary enterprises, aligning our interests as closely as possible with the entrepreneur(s).
|Studio Mandate||We seek to co-build companies at the nexus of growth, impact, and diversity|
|Stage||From co-founding to just pre-Series A, but most commonly at/around Seed stage|
|Typical Check Size||No up-front cash investment at pre-Seed, $100,000 at formal Seed round* , and situationally-dependent follow-on check sizes. * Studio company Seed rounds must meet minimum “market” terms to be eligible for funding.|
|Ownership Target||5% (pre-Series A) - 20% (co-founding), with a historical average (through 2020) of 8.2% of starting equity across the portfolio|
|Equity or Common Stock Options||Yes, depending on stage and tax implications|
|Investor Rights for H/L Equity||Standard, typically no board seat|
|Follow On Rounds||H/L Studio has typically purchased its initial equity or common stock options, invested in later rounds (pro rata or more, including leading), and also has had the capacity to provide short-term loans|
|Geography||US-domiciled entities only, all 50 states, no requirement to move to NYC|
A Powerful Ecosystem of Support
H/L Studio does not offer upfront cash investment in pre-Seed companies, but commits to $100,000 investments in the formal Seed Rounds of our studio companies assuming market terms and valuations. In both cases, we bring a unique model of engagement into the fold, staying with our companies at full levels of focus and throughout their natural cycles of growth. As an H/L Studio portfolio company, you have at your disposal the following resources:
We have nurtured an extensive global network of key startup and venture ecosystem relationships spanning investors, Fortune 500 companies, nonprofit and government organizations across a variety of sectors. We believe that the social capital powering H/L Ventures is meant to be shared and we work hard to remove the proverbial six degrees of separation between you and the stakeholders you need, including talent, customers, partners, media, and investors.
H/L Studio is home to a powerful team of operators, from smart generalists to vertical-specific subject matter experts. Most of us have built companies, served as early employees of venture-backed startups, or otherwise have played a key part in building a business from the ground up. Organized in a hub-and-spoke model around our core portfolio staff, we are also supported by our network of Venture Partners, EPIRs (Entrepreneur Partners in Residence), Advisors, and Member Partners.Click this footnote for disclosures
Venture Partners and EPIRs (Entrepreneur Partners in Residence) are independent professionals contracted by H/L Ventures to provide services to H/L Ventures. Advisors are independent members of the firm’s Advisory Board and provide general advice to H/L Ventures. Member Partners are independent equity owners of H/L Ventures. Venture Partners, EPIRs, Advisors and Member Partners are not employees of H/L Ventures and do not make investment decisions.
H/L’s Trusted Partner Network is a highly curated searchable database of 150+ startup resources in categories such as Finance & Accounting, Legal, Marketing, PR, Cloud Hosting, Executive Coaching, CRM Systems, etc. Most of our partners offer H/L specific perks and discounts to our portfolio companies, or offer a dedicated point of contact, a service otherwise unavailable to startups outside of the H/L network.Click this footnote for disclosures
Our Trusted Partner Network consists of service/product vendors that are described as follows: a) we have worked directly with the vendor and have first-hand knowledge of its products or services, b) we have conducted some level of due diligence with respect to the vendor’s product or service offering, but have not worked directly with the vendor, or c) we have identified the vendor as offering meaningful benefits to our portfolio companies in some way, but have not conducted any significant due diligence with respect to the vendor or its service/product offering. In no event does inclusion in H/L’s Trusted Partner Network imply any guarantee on the part of H/L and each portfolio company is required to conduct its own diligence with respect to any potential business engagement with such vendors.
Our experience working with founding teams tells us every aspect of growing a team, from identifying top talent to establishing compensation practices, takes up a lot of time and resources. We’ve built a support system to help founders get to the key hire in the most efficient way possible without cutting corners. This includes our Talent Network and our Recruitment Practice, which offers access to top executive talent on founder-friendly terms.
Our founders proudly speak of us as among their closest, most interests-aligned partners. H/L’s reputation and involvement on the cap table and in a start-up’s day-to-day operations is a positive signal to our colleagues in the investment community who diligence not only the company, but also the investment groups behind it.
H/L Studio’s involvement with our portfolio companies is as hands-on and supportive as possible throughout the entrepreneurship journey. We host weekly check-in calls between our senior operating team and the portfolio companies, touching upon every category of importance, including but not limited to Sales, Partnerships, Fundraising, Product, Marketing & PR, Hiring, Board Building, and more, followed by us activating our team and networks to address any action items we may have. All of this is in a supportive mode, meant to ensure that whatever needs our portfolio companies have, we remain actively relevant and helpful, every day.
Our Investment Thesis
H/L Ventures stands for a different investment thesis; one that prizes our relevance and role as well as the key characteristics of prospective companies and founders. This is how we approach partnership and investing.
We seek companies that show potential for high growth. This includes a uniquely qualified team and an innovative product solving a large market need. We seek founders who are brilliant, team-oriented, responsive, resource magnetic (we can explain!), and open to collaboration with our team.
We seek companies for which the H/L Studio Model will be highly impactful. A vital part of our due diligence process involves us working to ascertain if our networks, expertise, and skills are relevant to the success of the company.
While many investors focus on the “it” factor most readily identified as a founder(s)’ charisma, we go a step further. Charisma alone is not enough (and sometimes too much!); what we seek is founders who have somehow aggregated unusual resources, partnerships, and advantages that cause us to wonder what about them made those breakthroughs possible. This is resource magnetism.
We seek companies that have a positive impact on the world either through the mission of the company or diversity of the founding team, and often both.
H/L Studio works with companies from idea stage (where we co-build and partner with you ahead of launch), to MVP, and all the way to when you have a working product. While the Studio allows for a lot of flexibility stage-wise, we do need to believe in the value proposition of the product you are building.
We are industry agnostic, as our large ecosystem and team allow us to be relevant across sectors.
We are focused on companies at the earliest stages, although at H/L Ventures we provide holistic, relevant support through every stage of growth. We start early, ranging from co-building companies to as late as pre-Series A. The majority of our portfolio companies join our Studio at the Seed stage.
Success does not have to mean a classic venture M&A or IPO exit. Companies who work with us can achieve long-term cash flows from a profitable operating company. Our measure of success is not tied solely to the pressure of a venture style exit.
Two Way Diligence
Each year, we screen hundreds of early stage companies to bring on a select few portfolio company partners. We recognize, also, that any founder will be equally selective about partnering with us: we celebrate this process of finding a mutual match. To determine if a company is a good fit for the H/L Venture Studio Model, we engage in a mutual discovery process described below:
This is a getting-to-know-you period during which H/L Ventures and the candidate company share stories, models, and initial reactions.
This is a key and unique element of the H/L Studio model in which the candidate founder(s) creates a list of everything they could imagine wanting to achieve. The Studio team schedules a call to share if and how our experience, skills, and network map against those needs. The process determines our relevance to the candidate and whether the candidate should consider H/L Ventures’ unique model.
Due Diligence Deep Dive
This is a standard VC due diligence process, which may include many documents and multiple conversations with various Studio team members. H/L will set up calls with key leaders and experts, as well as introduce the candidate founder to our Venture Partners and team as well.
Once an Offer Letter is sent to the candidate, H/L Studio concurrently introduces the candidate founder to existing Studio portfolio company partners for important reference conversations. Assuming all goes well, the parties negotiate a final agreement and proceed!