Businessmodel of True Ventures

Customer Segments

True Ventures has a niche market business model, with a specialized customer segment. The company targets its services at early-stage technology startups.

Value Proposition

True Ventures offers three primary value propositions: accessibility, innovation, and brand/status.

The company creates accessibility by providing funds to early-stage firms. Most venture capital outfits focus on raising funds for later-stage startups, limiting opportunities for young entrepreneurs. However, True Ventures was founded on a mission to nurture newer companies. It meets these startups when they are in a formative phase, with a first investment of around $1 million - $3 million.

The company fosters innovation by taking risks. Investing in newer startups has enabled it to position itself ahead of cutting-edge markets such as the connected devices, robotics, 3D printing, machine learning, and autonomous vehicle industries. It purposely seeks out firms that think disruptively.

The company has established a strong brand as a result of its success. It manages about $1.3 billion in investor capital and has funded over 220 companies featuring 7,000 portfolio team members. These include firms such as FitBit, Puppet, Blue Bottle Coffee, Bandcamp, Namely, and Ring.

Channels

True Ventures’ main channel is its business development team. The company promotes its offering through its social media pages and participation in conferences.

Customer Relationships

True Ventures’ customer relationship is primarily of a dedicated personal assistance nature. The company assists clients through guidance from assigned personnel.

That said, there is also a self-service component in the form of “True University”, a section on its website that features videos of speeches on entrepreneurship from engineers, salespeople, designers, and marketing managers.

Key Activities

True Ventures’ business model entails providing capital to early-stage startups and helping them grow in value.

Key Partners

True Ventures does not maintain any formal partnership programs or have any partners of note.

Key Resources

True Ventures’ main resource is its fund of $1.3 billion, which it uses to invest in early-stage firms. It depends on human resources in the form of advisors to guide clients in their use of the funds.

Cost Structure

True Ventures has a value-driven structure, aiming to provide a premium proposition through significant personal service. Its biggest cost driver is likely investment acquisition costs including expenses for personnel, travel, and due diligence.

Revenue Streams

True Ventures has two revenue streams:

• Management Fees – Fees charged to startups for having their assets professionally managed. They are typically determined as a percentage of the fund’s capital commitments, and are paid on an annual basis.
• Carried Interest – A share of the profits that startups earn from an investment.