The venture frenzy is forcing VCs to close deals in 4 to 14 days. Harlem Capital’s Gabby Cazeau explains how she wins.

Gabby Cazeau

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As early-stage fundraising has gotten hotter, VCs have been closing on deals faster — and things are no different at Harlem Capital, which recently announced a new fund backed by investors such as Apple.

The diversity-focused venture fund has cut down its average deal time from 21 days to 14 days over the past year, Harlem Capital principal Gabby Cazeau told Insider. But that doesn’t mean the firm has scrimped on vetting the startups it backs, she added.

Due diligence recently became a hot topic among investors after Spark Capital severed ties with camera-app maker Dispo, following an Insider investigation into an allegation of rape involving a former member of cofounder David Dobrik’s YouTube Vlog Squad.

But Cazeau, who first joined Harlem Capital as an intern in 2018, says she has found a way to speed things up: by talking to people inside the same industry as the founders she’s seeking to vet. That used to be one of the last steps in the deal process, she told Insider, but recently she’s moved it up as one of the first tasks on her list.

In other ways, the firm’s process hasn’t changed all that much, Cazeau said, since it’s always done remote interviews with founders. But without in-person gatherings, she’s been meeting virtually with entrepreneurs much more frequently than in the past.

“We’re trying to learn as much as we can in a compressed period of time,” she said. In at least one case, she added, she’s been able to get a deal done in four days.

With its new $134 million fund, Harlem Capital has more money at its disposal to put into a new batch of companies. The firm has said it aims to back 45 startups with its second fund and over the next 20 years to fund 1,000 companies led by founders from underrepresented backgrounds.

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Startups in e-commerce are prominent on Cazeau’s radar these days, she said — especially those that tackle back-end operations such as inventory and supply chain management. Harlem Capital, for instance, has invested in Malomo, which runs a platform for e-commerce business to manage the shipping process for their products.

“There’s always a pendulum shift,” Cazeau said. “Two years ago, everyone said consumer startups were dead. Now they’re popping.”

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Source:: Business Insider – Tech

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