Investment Process

Overview

OCV employs a rigorous underwriting methodology to determine if an open source project has venture-scale COSS potential.

The stages include Project Identification, Validation, CTO Recruitment, and Investment Committee.

This process is owned end-to-end by OCV Investors, hands-on company builders who identify and underwrite projects, pitch them to the Investment Committee, and launch and incubate the resulting companies.

The Investment Pipeline is tracked in Pulse.

All Investment Memos should use the Investment Memo Template.

Stage 1: Identification

Investors verify the project meets minimal open source qualifications and warrants further investigation. We're typically looking for projects with at least 20 pull requests per month and 5,000 stars, with a permissive license (MIT, Apache, BSD, etc.).

Investors and GPs meet weekly to discuss the investment pipeline and any newly identified projects. Investors are expected to identify at least 2 new projects per week.

Stage 2: Validation

Investors undertake a rigorous, multi-stage evaluation process to assess whether a given OSS project presents a viable foundation for creating a venture scale company. This outcome of this process is an Investment Memo.

Stage 3: CTO Recruitment

CTO is the most crucial part of our investment process. The CTO recruitment process typically occurs concurrently with the COSS validation. Through our conversations with the authors and top contributors of the OSS project, we are able to assess and quickly develop a short list of individuals we believe are the top Founder CTO candidates for the company.

The OCV investor who sourced the project leads typically leads the recruitment, but CTO recruitment is viewed as a team sport, with multiple General Partners and other investors always available to engage as needed. Armed with extensive project knowledge, comprehensive market and competitive research, and deep conviction around a product vision and commercial strategy, we present potential Founder CTOs with a compelling view of how their passion can become a generational company. Our offer is straightforward: we match their current salary, provide meaningful founder equity, and partner with them to build early traction and recruit a permanent CEO.

Stage 4: Investment Committee (IC)

Investment Committee (“IC”) meets monthly to review and to discuss all projects being proposed for incubation. The investment committee is composed of the three General Partners. All three General Partners are equal members of the investment committee. Other attendees include the CFO and the Investors proposing projects for incubation.

IC can vote to approve an investment, approve an investment conditional on recruiting an acceptable CTO, reject an investment opportunity, or defer on a decision pending additional research or validation.