- Investors want to work with skilled and dedicated founders with well-defined mission statements.
- While venture funding has slowed down, investors are still looking for the next big thing.
- Founders tackling large markets ripe for disruption are among the most in-demand.
It remains a challenging time for startups to raise venture capital.
According to CB Insights, venture funding decreased 23% in the second quarter to $108.5 billion, spread out across 7,651 deals. That’s the biggest quarterly percentage drop in the number of deals in a decade.
But investors who write checks to companies in sports, sportswear, health tech, and wellness are still taking phone calls.
While healthcare-venture investing in particular has cooled, investors are still searching for the next big company, as they remain optimistic about scaling and exiting companies doing everything from making health data more accessible to capitalizing on the ongoing popularity of collectible sneakers.
As one example, Oura, which makes a ring that monitors vital information such as sleep and heart rate, is in the portfolio of several firms listed below. In April, the company raised more capital at a $2.55 billion valuation.
“There’s still a good amount of competition for the best deals,” said Steve Ahern, a partner at KB Partners. “The best deals are still getting done at solid valuations.”
Ahern, and other venture capitalists who spoke with Insider, highlighted similar criteria they look for before greenlighting an investment. Among those are a skilled and dedicated founder, some sales momentum, and a defined market, preferably a giant one ripe for disruption.
However, founders can still expect a little more due diligence from investors given the current economic climate.
“We’ve been a little more selective about new investments,” said Kate Delhagen, founder and president of Oregon Sports Angels. “There needs to be a viable product and viable customers.”
Insider compiled a list of venture capitalists based on industry recommendations and vetted the nominees against recent investment activity. Investors range from traditional venture-capital firms to angel investors and accelerators designed to get promising companies ready to accept investment.
Below is the full list and what each investor is looking for:
Alison Ryu, Lisa Blau, and Amanda Eilian, partners, Able Partners
Key investments: Able Partners focuses on investments in companies that promote health and well being, such as Oura, which this year announced it has now sold more than one million of its rings. Other recent investments include Bumble, Goop, Spring Health, Chief, Found, Daily Harvest, and Blueland.
How to get their attention: “We look for a strong connection between the founder’s lived experience and the problem they are solving,” partners Lisa Blau, Amanda Eilian, and Alison Ryu told Insider, in an email. “Founders we connect with understand that overlooked or underserved populations that are often stigmatized can represent significant market opportunities. The founders who immediately grab our attention know their industry, market dynamics, customers, competition and unit economics inside and out and are able to attract, inspire and retain great talent.”
Jason Norman, partner, Concrete Rose Capital
Key investments: Concrete Rose invests at the “intersection of sports and technology.” Recent investments include the sneaker-trading platform Tradeblock, which touts itself as an alternative to StockX and Goat. Norman also led investments in Buzzer, Overtime, and Athlytic.
How to get his attention: “As a former college basketball player at Harvard, I’m familiar with the focus and resilience it takes to multi-task and persist through challenges, and that’s something I look for in founders. At Concrete Rose, we consistently back founders who demonstrate the grit and determination it takes to scale a company, knowing the journey is not easy. We are motivated to partner with founders who have a big vision to tackle a large market, who are authentically building innovative solutions, and who are reimagining the pathways to wealth and opportunity for underrepresented people of color.”
Joe Vennare and Anthony Vennare, cofounders, Fitt Capital
How to get their attention: “We’re easily accessible and welcome outreach. It’s common for someone to discover us through our newsletter or podcast before connecting to discuss industry trends or introduce themselves or their company. Because we invest at the earliest stages, we enjoy meeting founders who are pre-revenue — as an idea is still taking shape. At that stage, founders who can clearly articulate why their startup needs to exist, the value it provides to users, and how it’s better than existing solutions stand out from the crowd.”
Nicole Johnson, partner, Forerunner
Key investments: Forerunner is focused on companies that serve consumers. Johnson specifically invests in health and wellness startups. Her recent investments include Calibrate, DUOS, Dutch, and Buffalo Market, a food distributor focused on plant-based and organic foods.
How to get her attention: “We at Forerunner have been obsessively researching the evolving consumer in recent months. A key insight has come to the forefront: Health and wellness are not niche categories anymore, but rather fully mainstream and front-and-center priority for nearly all consumers. In this category, we look for tech that makes wellness easier to access and simpler to manage for consumers like Dutch or DUOS, with greater depth of insight that can empower better health choices like Oura and Calibrate. In addition to ‘better-for-you,’ we’re prioritizing ‘better-for-the-planet’ companies that embrace sustainability as they bring healthier products to market – like Eclipse or Buffalo Market – because the planet’s health is increasingly important to mainstream consumers.”
Steve Ahern, partner, KB Partners
Key investments: Ahern is a Los Angeles-based partner for KB Partners, which, like Concrete Rose above, focuses on the intersection of sports and technology. For KB Partners, that includes companies working on human performance, media, sports betting, e-sports and video games, and live events. Recent investments include GridRival, Omorpho, Stadium Live, and StatusPRO, a virtual-reality gaming company.
How to get his attention: “While there are a number of successful niche businesses in the sports space, we’re looking for startups that can be built into category-defining companies with broad consumer or B2B customer appeal. Given how early we’re investing, we’re also highly focused on people and seek out founding teams that bring a unique perspective, experience or network that can unlock the opportunity they’re going after.”
Kate Delhagen, founder and president, Oregon Sports Angels
Key investments: Oregon Sports Angels is a membership group of angel investors focused on sports product, technology, and innovation companies. Recent investments include pickleball products company Revolin, live-sports artificial-reality company Quintar, recovery products company Alleviate, and community cycling app Preem.
How to get the group’s attention: “Oregon Sports Angels members look for innovative brands with a strong founder (team), a compelling mission, and early product-market fit. We invest in companies with aligned values of diversity and inclusion, innovation, and teamwork. The main differences for OSA from 2021 to 2022 are that we increasingly seek companies that consumers and customers see as a ‘must have’ vs a ‘nice to have,’ and the balance has shifted to more critical due diligence and more investor-friendly terms.”
Payam Daniel Abbassian, principal, Path Ahead Ventures
Key investments: Outdoor retailer REI last year launched Path Ahead Ventures, a $30 million fund for Black, Indigenous, Latina/o/x, Asian American and Pacific Islander founders. Path Ahead includes two business accelerators and an investment fund. This year it’s invested in three companies, including the size-inclusive, sustainable outdoor apparel brand Alder. Additional investments are expected this year in outdoor and outdoor-adjacent companies.
How to get his attention: “What it means to be in the outdoors is changing fast and this means new customers, new markets, new challenges, and new opportunities. As we consider direct investment support, we look for founders from diverse backgrounds that are building products, experiences, and services that bridge access to the outdoors and are available to people everywhere.”
Krista Worzalla, senior investment associate, Swiftarc Ventures
Recent key investments: Swiftarc is an early and growth-stage investor that invests in consumer and healthcare brands through three funds. Recent investments include the weight-management company Intellihealth and Proudly, a company founded by Gabrielle Union and Dwyane Wade that sells products for babies with melanated skin. Swiftarc’s portfolio includes Topgolf China and Outdoor Voices.
How to get her attention: “We enjoy speaking with founders who have deep expertise in their chosen industries and have found innovative ways to prove a product-market fit. The excitement, passion, and commitment that comes with these kinds of founders is infectious and our first draw of attraction to learning more about their story and what they are building. Throughout the diligence process, we are keen on working with founders who are open to building a strong and transparent partnership because the journey of entrepreneurship is never easy and the sense of partnership versus just an investment relationship is key in navigating choppy waters. And finally, whether an opportunity is coming in through a warm introduction or cold outreach, we appreciate when founders have done their diligence in identifying that their company might be a fit for one of our three funds.”
Dana Rowley, mentoring programs coordinator, San Diego Sports Innovators accelerator
Key companies in the accelerator: San Diego Sports Innovators is a nonprofit that operates an accelerator, a 20-week program that pairs founders of sports and active-lifestyle companies with mentors and investors. Applications are generally accepted in January and August. Graduates include surfing, skateboarding, yoga, climbing, running, and cycling companies. Recent accelerator companies include CamerEye, a pool safety system powered by artificial intelligence; the global mountain bike footwear brand Ride Concepts; and Alive Fitness, which offers exercise analysis software that uses artificial intelligence.
How to get the program’s attention: “There are four key criteria that we look for – coachability, product validation and traction, business model viability, and entrepreneur commitment. The business also needs to fall under our sports, active lifestyle and healthy living industry umbrella. We’re looking for companies in growth stages. Each company gets paired with four to six mentors. The accelerator is built for businesses that have experienced some success and need guidance.”
Guillermo Chapman, partner, Amador Holdings
Key investments: Based in Panama, Amador Holdings launched in 2020. It initially focused on investments in large Latin American industries undergoing digitization. More recently, it’s been diversifying its portfolio to include software-as-a-service, health and wellness, and other investments. It recently invested in Selia, a mental and emotional health app.
How to get his attention: “Given Latin America’s recent digitalization and the development of strong technological infrastructure, many industries are being disrupted. Several times Amador has been faced with evaluating competing businesses, and finding the right founding team is the key. Not only must they be knowledgeable about the industry and business model, but they have to be strong recruiters and sellers, know how and when to fundraise, and negotiate the right terms with the right partners.”