Valence was born over a series of lunch meetings— fries, soda, tea, and sandwiches. During those meetings, we discussed the themes we are about to share with you here. To start:
Think of a product you love.
Think of a product you’d hate to lose.
Think of a product you can’t imagine living without.
All those products started as ideas— electrons lighting up different neural networks in someone’s brain.
An idea is like a spark in a car’s engine— combusting fuel, combusting fuel, pushing pistons, rotating the crankshaft, and setting the car into motion.
When an idea is given the right scaffold and mechanics, it sets into motion a series of events— events which can result in a business that is treasured by customers, employees, investors, and the broader community.
Easier said than done.
For a spark to turn into a generative flame, it must have catalyst and fuel. Fuel and catalyst comes in many forms— in the startup ecosystem, these are the three major forms:
Capital.
Human potential.
Technology.
All three forms must work together in concerted effort, which presents a number of challenges and opportunities:
Capital by itself has little utility. Especially in its printed form. You can’t eat it, you can’t wear it, you can’t converse with it, and you would be hard-pressed to turn it into shelter.
Capital needs a convertor to have utility— that convertor is typically a combination of human effort and technology.
Human beings (typically founders) provide the mental, emotional, and physical scaffold to direct capital and people towards a goal.
However, every human being has a unique set of values, needs, and desires— many of which can change at a moment’s notice. So, how do you create and sustain coordinated effects for the long-run?
Technology— used well— augments human efforts, reduces mundane, repetitive tasks, and takes care of large-scale computations with speed and precision.
Put to proper use, technology frees us to focus on what makes us uniquely human; creative expression, feelings, and connection.
Let’s talk about some important present state of affairs:
First, founders are demanding more than just capital from their investors. Typically, the major injection of capital is from Venture Capital (VC).
However, given the history of negative experiences founders have had with venture capitalists, VC as a brand has suffered from broken trust— many founders perceive venture as a necessary evil rather than an invaluable, treasured component of a great business.
Now, founders and their teams sit at an important nexus— they serve as a point of conversion between capital and enriched, happy, loyal customers. Broken trust between founders and investing entities creates friction, slowing the flow of capital into the hands of founders, and in many cases, hindering the speed and chance of converting great ideas into material reality.
To attract the right values-aligned investors, founders must take the time to effectively communicate their narrative, value-proposition, and modus operandi. If founders can’t impactfully communicate their proposition to investors, capital won’t find its way into their hands.
To attract the right values-aligned founders, funds must innovate, build lasting relationships with founders, and open more doorways for portfolio companies to grow.
Second, there is a growing breed of emerging fund managers on the rise— serial entrepreneurs and ex-operators who want to deploy capital to startups and stimulate innovation.
These emerging fund managers want to provide founders the sort of capital and support they wished they had— they are inspired from within to be the best stewards of capital they can be.
Furthermore, these managers have the empathy and the necessary mental model to build trust with founders, support founding teams, and generate returns for their investors (Limited Partners). But they have their work cut out for them:
The venture capital space is becoming increasingly saturated, especially at the early stage of investment, making it harder and harder for funds to differentiate themselves.
Without prior experience as a fund manager, these emerging managers are unlikely to secure institutional funding.
They must cut through the negative perceptions founders have of VCs, gain the trust of founders, and continue to nurture that relationship.
Again, until these emerging managers build trust and credibility as stewards of capital: 1) Pools of capital may never find its way to capable hands, and 2) Founders may never have the chance to engage with them and put their capital to good use.
The conduit through which capital flows— trust.
Third, technological advancements continues to shift the job landscape, making old forms of labor redundant. While jobs provide the necessary means for people to care for their safety needs, they also provide for a basic human need: to perform purposeful work, to contribute to a community, and to feel significant.
With tectonic plates continuing to move within the labor landscape, human beings are confronted with the need to:
Learn new things, faster and faster!
Clarify and define their purpose.
Position themselves to contribute within the new economy.
Last, and probably the one thing that aligns the incentives of unlikely collaborators— venture capitalists and conservationists— climate change. Climate change poses an existential threat to our race— no high-performing investment portfolio can thrive on an uninhabitable planet.
The solutions to reversing the effects of global change already exist— the book Project Drawdown outlines them well. To implement those solutions, stakeholders from all walks of life— investors, founders, and activists— must find a way to align capital with the right people and behaviors.
However, alignment is predicated on trust— trust that we all ultimately want the same positive outcome, even if the means by which we have taken to get there differ.
In light of the above, we asked ourselves this question:
How would we like to contribute?
We recognize that we aren’t responsible for ‘saving the world.’ — we can’t achieve everything for everyone and solve every problem. However, we do have unique experiences, talents, and passions that we can contribute to the best of our abilities. There is certainly no shortage of work to be done.
At Valence Advisory, we understand: 1) The drivers of human behavior and belonging, 2) How to start and grow a business, and 3) How capital can work as a great amplifier. Furthermore, we recognized that the nucleus of game-changing solutions are founders (present and future) and their teams. Therefore, our advisory services to founders and funders has been designed to:
Strengthen trust between values-aligned founders and funders.
Assist funders to raise and deploy capital to great effect.
Empower founders and their teams to realize their potential.
Electrons, protons, and neutrons aren't visible to the human eye. However, fire them through the Earth’s magnetosphere, and you illuminate our night sky with lights of varying color, complexity, and beauty— human potential is much the same. Given the right operating conditions and direction, we all have a unique spectrum of contributions that can be expressed commercially and shared at scale.
The combining power of human potential, technology, and capital, is boundless. With the strategic application of capital, technology, and a personal touch, we direct assist unique genius to be properly expressed commercially.