It Takes A Village
Texas-based VC outlet Ensemble just raised $100 million to help prove its timely venture capital investment hypothesis: teams are as important as founders.
Any venture capitalist firm on the block will talk about the importance of evaluating a startup’s founders. But Ensemble wants to go one step further by investing in startups with great overall teams. It believes you need to consider every crew member helping to steer the ship, not just the ones who got it off the ground.
In theory, evaluating all employees in a young company is a good idea. But, in practice, evaluating dozens of employees across thousands of startups can quickly become overwhelming.
To address this issue, Ensemble built a proprietary data algorithm to track employees at different startups. The algorithm filters through thousands of startups to surface the select few that have investment potential based on the depth of their team. Ensemble still conducts due diligence, but with an optimized and manageable starting pool.
According to Ensemble, this data-driven approach allows the VC firm to take calculated risks on promising projects across industries that might scare off other investors. Or, in the words of Ensemble co-founder Collin West, “The beauty of using data is it helps you push your bias away and show up with curiosity.”
This new approach could be coming at a perfect time.
So far, in 2023, 100,000 tech workers have been laid off. This means that, over the next few months, thousands of talented ex-Google (GOOGL), Apple (AAPL), and Amazon (AMZN) workers could be looking to join new companies. Some of those job seekers may land at startups, lending these budding businesses access to a wide expanse of qualifications and experience.
And, wherever the best teams end up, Ensemble will be waiting.
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