Doriot Roundup: Importance of Alignment

Happy Friday Doriot Venture Community!

High five to the 6 the new members this week! ✋ 

Whether you're a seasoned investor or just starting out, our goal is to provide valuable insights in Venture that help you make informed decisions and achieve outsized returns. Today, we’re going to focus on Founder / Investor alignment.

Table of Contents

• Success Quote and Discussion

• Importance of Alignment

• DVC Deal Released

• DVC Portfolio Updates

Success Quote and Discussion

“Imagination is everything. It is the preview of life's coming attractions”

Many of us are conditioned to think, “I’ll believe it when I see it,” rather than “I’ll see it once I believe it.” The gap between these two mindsets is vast, and this difference is a key ingredient for success if you subscribe to Einstein’s quote above. Simply put, if you can't imagine a possibility in your mind, how can it ever manifest in the physical world?

What Einstein suggests is that when we use our imagination—whether for good or bad, consciously or unconsciously—we are actively shaping our future. Our thoughts set the stage for the realities that will unfold in the coming days, weeks, months, and years. While we may not know when or how, our thoughts eventually become our experiences.

This emphasizes the importance of being mindful of our thoughts, but more importantly, it empowers us to start shaping our desired success today—an accessible and practical strategy that we can hone anytime, anywhere, and for free!

Importance of Alignment

By: Gerry Hays

For the past several weeks, we’ve discussed the three pillars of successful venture investing: 1) A Fertile mindset; 2) A Sound Strategy; and 3) Disciplined Execution.

During the execution phase of building your portfolio, you will be assessing the credibility of each investing opportunity to determine whether you’re investing in a deal (or not). Specifically, we concentrate on five broad areas:

1. Business Model

2. Team

3. Competitive Advantage

4. Market

5. Alignment

Last week, we discussed how to assess a market. Today, we’re looking at alignment.

Definition of Alignment

Alignment is an underrated yet crucial concept. In business, we often talk about strategy, innovation, and growth, but alignment? It’s the invisible force that holds everything together, especially in long-term ventures. Whether you’re investing in a startup, starting a new job, or even entering a civil union such as marriage, alignment is at the apex of what makes these relationships succeed—or fail.

Think about alignment as the equivalent of tuning an orchestra. Each instrument has to play its part perfectly in sync with the others. If one instrument is off, the whole performance suffers. In business, this means that every stakeholder—whether an employee, investor, or founder—needs to be on the same page when it comes to goals, strategy, and expectations.

On the surface, a startup investment might seem promising. The market is hot and the team seems capable. But beneath that, if you’re not in sync the style and substance of the founder(s), you’re setting yourself up for frustration. Startups are inherently chaotic and will inevitably face rough patches. It’s during these challenging times that misalignments are revealed, causing friction and negative energy around the deal—an unhealthy and entirely avoidable situation.

The QAI Approach to Alignment

The QAI methodology puts a premium on alignment because it’s often the most overlooked yet critical factor. Here’s how QAI breaks it down in simple terms:

Some of this is difficult to assess without meeting the Founder, but even in the retail venture segment, you can objectively evaluate factors like company stage and team communication on the listing page. For example, if a Founder isn’t responsive in the Q&A section during fundraising, it’s likely they won’t be responsive after the round either. Is that acceptable to you? If not, you might want to pass on investing in the opportunity.

Next week, we’re going to delve into the topic of startup revenue models.

DVC Deal Released

For DVC Premium Members, we just released our analysis of AtomBeam, currently listed on StartEngine. You can access the analysis here.

DVC Portfolio Updates

Again, no meaningful updates this week.

Have a great weekend everyone!

Sincerely, Team Doriot