Operating Principles

Our framework for making decisions and taking action, built on years of experience and learning what success looks like for OCV’s portfolio companies.

We build for venture-scale

Many project maintainers or potential founders ask us early on about our expectations. For example, they ask if we will demand they become profitable early, or if we “flip” companies quickly, etc. Like other venture firms, we only have one goal: when we start a new company, we expect that the company eventually has the potential to become huge and achieve venture-scale returns. This usually means $1B+ valuations or IPO, and over $100M in revenue.

OCV companies strive to build big companies that achieve high revenue targets and growth rates—founders are signing up to swing for the fences and push the pace on how fast they can grow the company. Raising venture capital is a vital tool needed to accelerate and fund growth. Founders need to be prepared to fundraise.

We build open core

OCV starts open core companies around existing open source projects. Building an open core company requires having a vision for building paid features around the open source core without degrading the original project or features. Solely providing support services for the open source project is rarely a viable business strategy.

OCV companies are expected to build on top of the open source project that the company originally started from. Traction around an open source software project is key to evaluating a company’s potential because it indicates utilization interest, and active users are a great resource for gaining feedback and marketing the company. We have yet to see success when a company pivots away from the original open source project.

We fund competing open source projects

We can't promise to never fund competitors—even if we wanted to. We never share competitive information between companies; it's unethical, and it would destroy our credibility.

There are countless factors that determine a startup's success, and the "idea" or "initial product" is just one element. It would be shortsighted to reject an exciting project simply because its initial product or target customer overlaps with another OCV company. The initial product and target customer typically evolve significantly by the time a company reaches IPO. We can't predict how startups will transform on their path to becoming massive businesses.

Our vision is to launch 2,000 companies annually in the future. Some overlap is inevitable. Many successful investors—including key backers of GitLab and WePay (like YC)—regularly invest in competitors, sometimes even within the same batch. Real competition rarely comes from other startups. Most companies fail from internal issues, not external threats. Focus on your own company. If a founder is fixated on competing with another tiny startup, they've already lost focus. The real external threats are established industry giants and market indifference. Lack of visibility is a much bigger risk than OCV funding a similar company.

We wind down when it’s the best option

Our model is not to give founders as many “shots on goal” as possible while they navigate the idea maze. We already know the project they are commercializing and the general market. We're going "all in" right away to prove there's a real commercial opportunity. If so, founders are off to the races. If not, founders can wind down without burning years of their lives.