Cincy’s Connetic Ventures has launched a Scout Program as a way to build a strong brand for sourcing deals and differentiating itself from other funds.
Cincinnati Future spoke with Kyle Schlotman, managing partner and CIO of Connetic Ventures about the move.
Let’s start with you telling us what a Scout Program is.
Schlotman: Scouts are people who are empowered to invest money in startups (usually in ~$50K increments at the seed stage) on behalf of a venture capital fund. Scout Programs are well established for coastal VCs but are rare for small funds located between the coasts.
The general purpose of the Scout Program is to leverage networks of Scouts to identify and source high-quality startups that a fund may not find on its own. Scouts can be former founders, portfolio founders, college students, or anyone else that is likely to know startup CEOs. These programs are very popular for large coastal VCs, especially lately, due to the increase in competition to find and put money in top deals.
How will Connetic’s Scout Program work and what are its goals?
Schlotman: Scout Programs vary greatly in how they are structured. Some programs give Scouts money to invest on the fund’s behalf, some funds give Scouts money to invest at their own discretion, and some refer deals and get a cut of the carry.
For our program, we wanted to make it as simple as possible for both the Scouts and Connetic. For any deal that the Scouts refer and Connetic ends up investing in, we will give them a percentage of our carry in the event of a positive outcome.
We believe that keeping our same process with Wendal® is best for all parties since we do not want to burden our portfolio founders with adding investment due diligence to their already full plate of running a company. [Wendal® is an AI bot that uses data and tech to remove bias and increase efficiency in the investment process.]
How did you pick the Scouts for the program?
Schlotman: If you know anything about us, you know that nothing we do is random, and everything is rooted in data. Part of our due diligence process through Wendal® is a behavioral assessment called startupDNA®. StartupDNA® helps us identify and assess founders and startup teams, allowing us to make more informed investments and help portfolio companies build stronger teams.
The Influencer is one of 22 possible StartupDNA® profiles. The Influencer is an impatient yet proactive and accurate risk-taker. They are also very social and are great advocates, which make them ideal candidates to help sell products or build brands. All the founders we chose are Influencers or share a very similar profile to the Influencer.
Who are the Scouts?
Brooke Rewa, CEO of Good Mylk
Brooke resides in LA and runs Good Mylk, a health-focused alternative milk company that develops innovative and much better for you products. We clicked with Brooke from the beginning. She loves doing things differently and has been a great advocate for us, and it has been a pleasure getting to know her.
Ablorde Ashigbi, CEO of 4Degrees
We met Ablorde in Chicago, where our partner Chris Hjelm was living at the time. Ablorde has one of the backgrounds that really stands out on paper and after meeting him we were not surprised by his impressive resume. Prior to 4Degrees, Ablorde was a VC at Pritzker Group, was a consultant at Bain & Company, and attended Harvard University. Ablorde is a great connector and has a great network through his prior roles and education.
Elise Tresley, CEO of Realm Foods / Lauren Benbassat, COO of Realm Foods
Elise and Lauren were a package deal! We love working with them both and they live in different states and have different networks. We’re excited to have them be part of our program and look forward to building a deeper relationship in the future. Realm Foods is a wellness company whose first product is a balanced meal in a shake. If anyone is looking for better nutrition on-the-go we highly recommend you try their products.