Jeffrey Thomas is the Executive Director and Founder of Lever, as well as the Managing Director of Lever Fund I. In a recent briefing with MFN, Jeffrey outlined key details about Lever Fund I and a new resource, the MFN Deal Room.
What is Lever Fund I and what types of companies are a good fit?
Lever Fund I is a venture fund run by Managing Director Jeffrey Thomas with input from five limited partners, who are all veteran venture investors. Each month, one company is invited to pitch to the group, prioritizing opportunities that fit the fund’s goals.
Lever Fund I invests in companies that are in the pre-seed and seed rounds of investment. The fund avoids capital-intensive business models, preferring to invest in companies that can get to market quickly. A company doesn’t have to be profitable yet, but the market validation of having paying customers is a crucial indicator that it would be a good fit for the fund.
Lever Fund I is also sector agnostic and has invested in startups working in fintech, health tech, climate tech, AI, advanced manufacturing, and more. The fund’s typical initial investment is $50,000 to $100,000, with reserve for follow-on investment.
What is the MFN Deal Room?
In general, deal rooms facilitate deal diligence by organizing key company documents to share with prospective investors. Deal room quality is an important indicator for investors. A deal room should be comprehensive and well-organized, more like your kitchen than your attic.
In working with founders, MFN staff have noted a great deal of variation in deal room format and quality. This inconsistency can be challenging for investors. While no two companies are the same, much of the information that investors wish to review in the diligence phase can be codified into a few core categories.
MFN’s solution was to develop the MFN Deal Room, a standardized deal room format that ensures investors are receiving consistent and comprehensive information for their diligence process. This not only saves investors time but also increases opportunities for founders. MFN has launched a beta version of the MFN Deal Room, which is currently undergoing testing through Lever Fund 1. This highly secure beta-stage resource is now available to any founders who wish to use it.
How do the two relate?
Startups under consideration for investment from Lever Fund I are asked to set up an MFN Deal Room. The deal room allows investment opportunities to be evaluated asynchronously, meaning that team members can more easily fit the diligence into their own workflows.
Like most early-stage investors, Lever doesn’t like to go it alone. In fact, founders are often required to raise a minimum from other investors before Lever commits capital – something that is facilitated by introducing founders to other investors in Lever’s network. This ensures that portfolio companies have sufficient runway to reach key milestones.
Nearly every early-stage investor struggles to evaluate the large number of investment opportunities that they’re presented with. As such, angel investors and large VCs prefer to learn about new opportunities from like-minded investors – in particular, investors who have themselves done diligence on a deal and have committed capital. If a pitch deck and access to a deal room can be shared, all the better, saving investors and founders a great deal of time.
As the MFN Deal Room grows beyond the beta stage, Level Fund I hopes to integrate it fully into the pitch process. This would mean offering founders the opportunity to give one presentation with one deal room for upwards of 10-20 investors all at once.
Keep your eyes peeled for more updates about the MFN Deal Room and opportunities to engage with Lever Fund I.
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