Skip the FOMO approach when pitching Nicolas Sauvage.
The founder and chairman of venture capital firm TDK Ventures said its founders can’t convince him with claims that other investors are already buying in or that a funding round is filling up quickly.
Sauvage told Business Insider that TDK Ventures takes a deliberate approach to investing, conducting an “in-depth exploration” of a chosen discipline before making a decision.
Founded in 2019, the company manages $500 million across four funds and invests in technology entrepreneurs. The team rigorously challenges its own assumptions before deploying capital, he said.
“We protect ourselves through our process,” said Sauvage, who leads the firm’s global investment activities in deep-tech sectors.
When TDK Ventures evaluates an investment, Sauvage says the company looks for four core qualities.
Number 1 is “first principles thinking,” which he describes as the ability of founders to recognize what they know and don’t know, follow evidence rather than consensus, and keep learning until they understand the problem enough to take action. That can be even more important in today’s rapidly changing workplace.
Sauvage recently published a blog on this topic, including the framework he recommends for using AI to expand capabilities while retaining human judgment and responsibility. As leaders look to leverage AI, they can easily measure workflows, directions, and hours saved. However, the less quantifiable measures may be more important, he said.
“Are people making better decisions, discovering what they missed, verifying consequential claims, and understanding the work they do under their own names?” He wrote in the blog.
The second quality he looks for in founders is being “magnetic,” Sauvage said.
“They can attract people to join the journey when it’s so uncertain and so risky,” Sauvage said. “And yet they manage to fuse people around them.”
That magnetism allows them to convince investors and customers before a product is even ready. Sauvage said it matters because no entrepreneur can succeed alone. It’s part of a founder’s “superpower” – his third investment criteria.
“They must have a superpower that no one else has,” Sauvage said.
A founder’s “superpower” may be deep knowledge of a particular area, a specialized skill, industry insight, or access to an opportunity that others may not yet know about. Sauvage likened it to a superhero movie: audiences want to see heroes join forces, but each needs a specific power to bring the group.
He added that founders need strong writing skills in addition to verbal communication. If they can’t communicate clearly in writing, he says, they will struggle to scale their business and build relationships with customers and partners.
“The limitation of always having to talk and explain everything verbally through phone calls or meetings is a scaling challenge that may not be obvious if the company consists of three or 10 people,” says Sauvage.
However, Sauvage said that once the startup grows to 50 people, the challenge will become more apparent. At 100 it becomes a bottleneck.
“They need to have that magnetism not only in person, but also when they’re not there,” Sauvage said.
That requires being “really, really good” at writing, he said.
