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Index Ventures Partner: why we’re seeing more full stack venture firms

Peter Stojanovic

Dominic Jacquesson, venture development director at Index Ventures, discusses the rise of full stack VC firms and what that will mean for the investor-entrepreneur relationship.

The term full stack startup is just over a year old now, since its conception in early 2014.

It’s yet another chapter in the evolutionary history of the startup and defines its most visionary companies to date: FSS don’t just attempt to correct a particular problem within a larger process or industry, they reimagine and reconstruct the system.

This approach to problem solving has opened up new ways to address challenges within each tech sector, and allows entrepreneurs to redefine their VC relationship with their exciting proposals.

It comes as no surprise then that firms have taken note of this upheaval, and initiated its own VC evolution.

Dominic Jacquesson, venture development director at Index Ventures, offers his thoughts on the reactive move of VC evolution.

“There are several reasons why I think that VCs are taking a full stack approach, firstly, they are taking a longer view – water-cooler conversations that used to make connections and sorting issues hasn’t scaled, so there’s a need to bring a new layer to that.”

It’s an interesting situation.

As startups become more attuned to innovation and disruption, entrepreneurs are getting savvier in who they approach for financial backing, or otherwise.

This has meant VC firms have to think about their offering, and how best they can promote their services.

“There’s a lot of capital around but in order to differentiate yourself you can’t just dangle a fat cheque in front of entrepreneurs anymore, you need to provide value add in a tangible format, above and beyond core support.”

Jacquesson’s point on more capital is another indication that VC evolution involves a shifting out of a capital-efficient mode to something more aggressive.

The last two years have seen IPOs and M&A figures stretched to levels not seen the turn of the millennium, but entrepreneurs recognize that the quantity of money is now less important than the quality of their backers.

“VC’s now need to go deeper on the ongoing operations of a business.”

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