Deep Space Ventures — Two Years In (by the Numbers)

2017 was year number 2 for Deep Space Ventures. I’ve learned a lot, experienced a lot, and made some great friends along the way.

The last two years have been a wild ride. Many ups, many downs. Some hard lessons learned. Some investments are clearly winning, some are not. I won’t get into that here, but I do get tired of hearing investors only talk about winners. We all have losers, and it’s OK (especially in early stage investing).

We have 18 portfolio companies and we plan to invest more than we had originally set out to invest (one of the advantages of being an “evergreen” fund). If I had to set a target, I’d say we plan to make 100 investments in early stage businesses and I suspect we will accomplish that in the next 7–10 years. I think we will target a pace of around 5–7 new deals a year, but if 2017 is any indication, maybe we will move faster than that.

During 2017 we:

• Saw 500 pitches (this does not include every deck that came in, but rather every company we took a thoughtful look or had dialogue with)
• Closed 9 new investments
• Made 3 follow-on investments
• Continued building a portfolio of diverse founders — 56% of our portfolio companies have at least one founder from an underrepresented group

Just below, I’ve summarized a list of things I think we have done well, some things we have done poorly.

What have we done well:

1. Establish a niche (actually 2) — I never realized how important this was until we did it
2. Found our way into cap tables with top tier investors (great source of learning and deal flow)
3. Curate a proprietary deal flow network (partially because of #2)
4. Invest in some companies that are growing rapidly and we are about close our first exit in Q1 2018 (Feb. to be exact)

What we can improve on (I’m probably missing some things here and would be happy to hear your feedback, if you have some):

1. Time management / allocation
2. Give better feedback when we pass after a close / thoughtful look at a business (not every deck we pass on, but every founder we interview)
3. Pass quicker
4. Be better about sharing opportunities we see with other investors, and with the right investors
5. Establish more relationships with pre-seed companies that we intend to monitor and track ahead of a seed round where we consider investing
6. Improve my abilities as an effective board member
7. If a company isn’t on a path to success, or we know the idea will not work in current form, get to a pivot or change direction faster

Portfolio Summary (18 investments to date):

Investments Made in 2017 — by the Numbers:

2017 Pitch Activity — by the Numbers (500 pitches):

I’m very excited as I look forward to 2018. I think we will do some great deals, we will have some positive outcomes and we will apply our lessons learned from the first two years of DSVC to not only be a better investor, but a better member of the startup ecosystem more broadly.

Stephen Hays is Managing Partner at Deep Space Ventures, a Micro-VC based in Dallas, TX that focuses on both Esports and B2B enterprise startups.

Follow Stephen on Twitter Here

Read More About Deep Space Ventures Here