2021.02.04 - by @Cédric Waldburger
When December rolls around we like to sit down and do a long review session within the Tomahawk team because transparency, feedback and open communication is essential to us. Coming together after an intense first 18 months at Tomahawk, having heard a lot of exciting ideas – 2'140 to be exact – and having partnered with ten of them, there was clear consensus amongst the team.
We realized this past year that it's time to double click on our goals, it's time for more focus!
Although this decision might seem straightforward, it’s the result of a lot of time and energy spent not being as agile as we’d like and not as thorough as the standard we set for ourselves demands. Deciding to be strategic in our focus is additionally challenging in that we have to say “no” more often to the eager entrepreneurs whose golden-egg ideas don't fall into our scope. The result however, is that instead of using up our attention and resources to familiarize ourselves in a space where we don’t have a wide range of experience, we can begin to thrive in our roles as investors.
We will focus exclusively on FinTech and DeFi because we believe in the impact it will have on our future and because we speak the language which allows us to have more meaningful and transparent conversations, stand by our decisions, give energy to essential tasks and quite simply, not fuck around.
Resting is Rusting 🔮
While we can't predict the future, we can make informed decisions about it
When we first started Tomahawk in 2019 we sometimes got odd looks when we spoke about our conviction that the next wave of ground breaking companies would be built in a remote or distributed setup. A lot has changed since then and we're seeing more and more founders organically building their companies in a way that offers a great in-office as well as remote culture. We've always believed that Global-First is at the core of great companies and what began as our thesis has since become the status quo. Though we still believe in the power of Global-First, our focus has tightened onto the next disruption of what most perceive as the norm.
Part of our role as investors is challenging ourselves to understand how the world is evolving and having an opinion about what the future will look like. During our December reflections, we embarked on an experiment where we each wrote an essay about what the future will look like in five years. We did this to identify common opinions and discuss opposing ones.
Despite having looked at hundreds of different B2B SaaS ventures in various areas in the past twelve months, two common threads were woven throughout our visions for the future:
- Every company will become a Fintech company
- Traditional financial products will be replicated on decentralized infrastructure
Transaction is a Function of Society 🤝
There can be economy only where there is efficiency
Each of us at Tomahawk profoundly believes that we are on the cusp of a revolution in the way we as economic beings transact, both with one another and between businesses. We feel the momentum for FinTech and DeFi growing, as this transactional behaviour is challenging outdated institutions, their limited capacity, and clunky execution. We predict that the more transparent and less fragile decentralized and liberalized infrastructure of DeFi will be the next status quo.
The unbounded potential in the financial industry resonates with our mission to enable the people behind groundbreaking ideas. Our decision to focus exclusively on FinTech and DeFi is also inspired by our past experiences in the space. Myself, Claude and Massimo are experienced in building, operating and supporting Fintech and DeFi companies that challenge the status quo such as SumUp, Dfinity, Monite, Liquity and iAngels.
We are conscious of the fact that even though the momentum of change is powerful on a macro scale, there is a massive need for experience, time and financial support on the micro level. That’s exactly where we see our focus and the Tomahawk’s sharpened edge leaving its mark.
The Road to Optimization 🚇
While a road would get us over the mountains, we prefer to dig a tunnel
Close your tabs, get rid of everything except for 64 belongings, or turn off all notifications. However you want to define it, in a world of pings fighting for your attention, consciously choosing your focus is the key to being successful. This holds true whether you’re building an early stage venture or a venture capital firm.
We had found ourselves in a bit of a catch-22 where the best thing about our roles - the fact that we could immerse ourselves in a lot of interesting areas with so many inspiring people - was also what made it difficult to fully invest our attention on just one thing. In our use case narrowing our focus will make us faster, allow us to go deeper and help our founders further.
Having a clear focus allows us to do more meaningful deep work which is essential to the very tenet of our roles as parallel entrepreneurs and partners for our portfolios.
- It will allow us to come to a decision faster meaning we’ll take less of a founder’s time so they can execute their vision
- It will allow us to go deeper, ask more relevant questions and build a network of experts and partners that support us and the teams we back
- It will allow us to go further as we’ll have relationships with all relevant later stage funds to help our portfolios raise follow-on funding when they need it
Being better partners means we are able to have more intimate relationships with our portfolios and a better understanding of their needs. Whether it be leveraging our global network, our own experiences as founders, testing their product or giving useful feedback, going deeper means getting our hands dirty, and we like it like that.
Pre-Seed and Seed Round is where we can provide the most value
Being better partners also means knowing where we can make the biggest impact. Each phase in a startup’s journey comes with its unique set of challenges and having been through the trenches ourselves, we know that's where we will add value.
We want to support companies that are about to raise their Pre-Seed or Seed round because we can help them solve typical but energy consuming challenges such as hiring your key employees, launching the first version of your product, building a company culture that scales beyond your physical office space, making sure you efficiently raise your next round and bringing the right partners on board. Some of the FinTech and Defi companies already in our portfolio include Liquity, Picnic, Clark, Pngme and Monite along with early investments in digital assets.
Of course, at the end of the day, we are in the business of enabling the people behind big ideas! Knowing that team fit is paramount to success, we might engage in exceptions outside of DeFi or FinTech if we've had a positive experience with someone before.
To sum it up:
- We believe all companies will be FinTech companies in the near future and decentralization will reinvent the financial industry.
- Focus enables us to be better partners.
- We invest in your Pre-Seed and Seed Round because that's where we can make the most meaningful impact as parallel entrepreneurs.
Ready to embark on the next phase of our trajectory, we are confident in two things: First, that it is the perfect time to narrow our focus and second, that doing so would allow us to act faster, go deeper and take it further than ever before.