DRW Venture Capital: What gives us our edge?

One of our values at DRW is learning, both formally and in our day-to-day interactions. Through weekly Geek Lunches, employees are given the opportunity to share their expertise with others across the firm. We recently featured Cliff Nelson, an Associate on the DRW Venture Capital team, who shared more about their core investment strategy.

At DRW, we are always looking to capture opportunities in the financial markets, so expanding into venture capital was a natural progression for our firm. With our deep trading heritage, we have a unique opportunity to work with companies that will benefit from our engagement beyond capital, which sets us apart from many VC firms, something that Cliff touched on during his presentation. Overall, his Geek Lunch emphasized how the DRW organization gives the group an edge in finding the best companies and consistently adding value as a partner of our portfolio companies.

Cliff works with Kim Trautmann, Head of DRW Venture Capital, to manage a portfolio of 20+ investments in the fintech space. Our VC team evaluates companies based on a few key factors. We focus on companies with high-quality management teams that have already achieved significant commercial traction, measured by revenues of $5mn or more. Whether leading a financing round or joining a syndicate, investing alongside other value-add investors is a must. Finally, we look for institutional deal terms and thoughtful governance structures.

In addition to these criteria, our VC team focuses on opportunities where companies can benefit from the firm’s vast experience and network in the trading industry. We’re able to help portfolio companies with fundraising, strategy, and company building, activities that are table stakes for VCs. However, they also aim for meaningful involvement with the broader DRW organization. Whether that means becoming a client, a liquidity provider or reviewing new products, DRW brings more to the table than just funding.

Our VC team sources most deals through relationships with a large network of co-investors and internally via DRW employees. We encourages employees to introduce them to companies with great products that might benefit from our investment and broader involvement. As a firm with no outside investors, we are able to be thoughtful but nimble in how we deploy capital and use our core expertise to collaborate with portfolio companies.

We’re always looking for new projects – head to DRWVC.com to learn more.