Investment Thesis: Strategy, Sectors & Scaling

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Investment Thesis: Overview

What is an investment thesis? 

• A VC investment thesis defines your focus areas and boundaries for investing.
• It helps investors filter out noise, concentrate efforts, and improve success rates.
• A basic investment thesis for venture capital can be framed as a Venn diagram of three elements: 
  
  • Sector/Domain: Industries or verticals you focus on
  • Geography: Where you invest
  • Stage: The maturity of the startups you back

This simple breakdown helps answer what is an investment thesis in practical terms.

What Drives Investment Decisions?

Sector/Domain

• Familiarity: Invest in sectors you understand from work, education, or experience.
  
• Affinity: Personal values or experiences may influence sector focus (e.g., legal tech).
  
• Interest: Past success in a sector (e.g., crypto) can shape future interest.

A strong sector focus is at the core of any VC investment thesis, ensuring investors don’t spread themselves too thin.

Geography

• Early-stage investing is often highly localised.
  
• Most angel investors focus on their immediate region (city/state/country).
  
• Cross-border investing may occur when there’s a personal or cultural connection (e.g., diaspora ties).
  

Stage

• Dictated by check size:
  
  • Pre-seed to Seed: 4–5 figure checks
    
  • Seed to Series A: Up to 6-figure checks
    
  • Series A & beyond: Requires $250K+ to multimillion-dollar checks
    
• Investing through syndicates or VC funds can give access to later-stage deals without needing large checks.
  

AngelSchool.vc Investment Thesis

The AngelSchool.vc approach is built on a structured, disciplined VC investment thesis that helps its global network make smarter decisions. This also serves as a practical investment thesis venture capital example for new angels to emulate.

Sector

• Focus on B2B technology and software.
  
  • Software enables fast iteration and traction.
    
  • Avoids hardware complexity and high upfront costs.
    
  • Fewer long-term dilution risks due to digital scalability.
    

Geography

• Global focus: US, Europe, and Asia.
  
  • 1300 investors split into regional clusters.
    
  • US cluster is most active; Europe and Asia clusters are growing.
    

Stage

• Primarily invest in Seed to Series A.
  
  • Occasionally pre-seed with traction.
    
  • Typical cheque size: $100K (pre-seed) to $1M+ (Series A).
    

Strategy: Grow investor network to increase cheque size and access later stages (Series B/C).

FAQs

What is an investment thesis in venture capital?

An investment thesis defines how and where an investor chooses to invest. In venture capital, it outlines the sectors, geographies, and startup stages an investor focuses on. Understanding what is an investment thesis helps investors filter opportunities, avoid scattered decision-making, and invest with greater clarity and consistency.

Why is a VC investment thesis important for investors?

A clear VC investment thesis helps investors concentrate on deals that align with their expertise and risk appetite. It reduces noise, improves due diligence efficiency, and increases the likelihood of long-term returns by ensuring every investment fits a defined strategy rather than being driven by hype or FOMO.

What are the key components of an investment thesis venture capital framework?

An investment thesis venture capital framework typically includes three core elements: sector or domain focus, geography, and investment stage. Together, these dimensions define where an investor looks for opportunities and how capital is deployed, making investment decisions more disciplined and repeatable.

How does geography influence a VC investment thesis?

Geography plays a critical role in a VC investment thesis, especially in early-stage investing. Many investors prefer local markets where they understand regulations, talent pools, and customer behavior. However, experienced investors may invest cross-border when they have strong networks or cultural familiarity in those regions.

Can new angel investors use a VC investment thesis?

Yes. New angel investors can benefit significantly from adopting a VC investment thesis early on. A structured approach—like focusing on specific sectors, regions, and stages—helps angels build a high-quality portfolio, learn faster, and scale into more sophisticated investment thesis venture capital strategies over time.