OPL BOBA TIME 🥤 — Exploring the Art of Fundraising with Calvin Du from Inception Capital

Disclaimer: The views expressed in this podcast do not represent the views of the organizations of the guests, and the projects mentioned are not investment advice. Sip on bubble tea, enjoy afternoon tea time, and let's talk about Web3 together! 🍵🌐💼 DYOR!

NONO: Do you drink bubble tea? What’s your favorite order?

Calvin: Yes, I do enjoy it, and my girlfriend loves it as well. So, I do drink quite a bit of bubble tea.

As for my choice, I usually go for the basic bubble tea with less sugar and less ice.

NONO: Can you briefly introduce yourself and your role at Inception Capital?

Calvin: I am part of the financing team at Inception Capital. In addition to handling the transactional aspects of our investment projects, I also lead our platform capabilities. As the platform head, I have built many resources internally, most of which relate to the market strategies of our portfolio, such as service providers and KOLs available for our portfolio companies. In my regular work, I actively communicate and collaborate with all founding teams.

NONO: As the platform head, what are the main goals of Inception's current fund and portfolio? What are your investment focuses and theories?

Calvin: In the venture capital space, most of the projects we participate in or lead are concentrated in the seed and pre-seed stages, covering various tracks and industries. We take an extremely pragmatic approach, including assisting projects in refining their pitch decks, project concepts, go-to-market strategies, and other key resources. Overall, we drive these conversations with the aim of being seen as a trusted advisor and partner, rather than just a capital provider.

For our portfolio, as the core responsibility of fund managers, a significant amount of our work focuses on identifying early and emerging management talent. Therefore, when considering fund-of-funds investments, we pay particular attention to vertical industry expertise and geographical knowledge to ensure our portfolio has a competitive edge in both specialization and regional coverage.

NONO: What criteria do you typically use to evaluate founders? What attracts you to projects like Avalanche, Celestia, and Scroll?

Calvin: In my view, the key to final qualification review lies in insight. In a 30 to 45-minute conversation, how much profound insight can the founder demonstrate to me? I prefer exchanges that are rich in "substance." We ask very targeted questions that require specific and detailed answers to prove the founder's deep thinking on particular issues. This is not limited to the product itself but also includes marketing, hiring, operational management, and more. All these specific answers give our financing team confidence in founders who can comprehensively consider and seriously address all potential obstacles and challenges.

Another aspect I particularly appreciate is the founder's deep understanding of their target customer base. In the seed to pre-seed stage, many companies either have not developed a product yet or are still exploring the market positioning of their product. The more thorough the market research conducted by the founder at this early stage, the lower our investment risk becomes. By sharing rich insights, founders can demonstrate a profound understanding of customer needs and priorities, greatly enhancing the financing team's sense of security and confidence.

We are committed to investing in founders who are dedicated to building the next generation of solutions, and we expect them to have a strong belief in the products they create. To put it simply, which is more painful: being pricked by a sharp needle or cut by a dull knife? Undoubtedly, it’s the needle. This means that the more precisely the founder describes the specific pain points their product aims to solve, the more deeply I can feel their conviction and passion. Combined with their technical expertise, grand vision, and the execution they demonstrate, these are the comprehensive qualities we look for in an exceptional founding team. We seek teams that excel in these areas, such as Scroll.

Avalanche and Celestia are more strategic investments because they are ecosystems, which provide us with many transaction opportunities.

In another investment case, we focused on Fyde, which has a very rich background. The team not only has a strong background in traditional finance (TradFi), which is crucial for building asset companies, but also has a profound understanding of the Web3 industry. Their business team performs excellently and has a technically strong co-founder. This cross-functional, cross-departmental collaborative team structure between Web2 and Web3 is something we highly appreciate and favor.

Finally, regarding execution, I want to mention the Yodayo team, which is dedicated to building a platform for AI-generated content. Initially, we were not deeply impressed by their preliminary presentation. However, as we engaged in deeper discussions, the founder's profound insights into the project's diverse perspectives gradually caught our attention. By thoroughly showcasing all his past efforts and progress, the founder convincingly demonstrated that he had explored all conceivable possibilities within the generative AI field and had comprehensively considered the impact of various factors when building AI-generated products.

NONO: How does your current method differ from the standards you use when screening emerging managers in the Inception portfolio?

Calvin: Essentially, our core evaluation criteria remain consistent—we place immense value on insight. We are looking for managers who can introduce innovative thinking to our investment perspective, especially in the cutting-edge field of Web3. We expect these managers to not only have deep industry insights but also to broaden our understanding of potential investment opportunities.

NONO: Once an investment deal is confirmed, how does Inception support and nurture its investment projects? What specific strategies do you have in terms of market planning?

Calvin: First, we leverage our extensive network to introduce portfolio companies to various venture capital partners, thereby broadening the dialogue channels between founders and the industry. Once the investment is officially completed, these companies can access our platform team and begin utilizing the resources provided by Inception. Additionally, we have an internal expert team that offers customized support to portfolio companies, including but not limited to the formulation and execution of go-to-market plans, to ensure these companies can effectively achieve their business goals and capital market strategies.

NONO: Do you have any final advice or insights for community builders actively involved in fundraising?

Calvin: It is crucial to truly discover your value and believe in your early venture capitalists. They will help you develop a more robust narrative fundraising plan, especially in your initial funding rounds. This also means not getting too hung up on those investors who reject you, but rather seeking out those who recognize and support you. Communicating with numerous venture capitalists is, to some extent, a numbers game; you need to find those who genuinely show interest and work closely with you. These individuals will provide you with the highest return on investment in your early entrepreneurial stages. At the same time, you should feel that this is a two-way communication, allowing you to comfortably discuss challenges and concerns with venture capitalists. If you can find an investor willing to engage deeply with you and brainstorm solutions together, that investor will steadfastly support you and provide assistance throughout your entrepreneurial journey.