Dating Group CIO Bill Alena on the Things the VC Fund Looks for in a Company to Invest In

In the first quarter of 2021 alone, there was $135 billion worth of deals. The second quarter reached $159 billion. And the most recent quarter peaked at $160 billion — and the year isn’t even over yet.

With the cash flowing like wine, gold-hungry hopefuls have been leaving their day jobs by the millions to start their ventures. 4.3 million workers quit their jobs in August alone. And many taking part in the “Great Resignation” hope that their ideas will make headlines of their own. But it takes much more than some enthusiasm to convince a VC to go along for the ride.

Introducing Dating Group’s corporate VC fund

Bill Alena, chief investment officer at Dating Group and head of its corporate VC fund, shares his insights regarding what it takes to take home the bread. And if you haven’t heard about Dating Group before, it’s time to add them to your list — especially if you’re in the business of helping people find love. Dating Group is now the world’s largest global dating company, with more than 33 platforms that help singles connect worldwide. The company’s recent acquisition of Cupid Media created an enterprise with projected annual revenue of $300 million.

Dating Group’s VC arm works with companies in the seed to Series B stage with investments of up to $5 million. The fund was established last year with an initial $50 million.

“We have two forms of investments,” says Dating Group Chief Investment Officer Bill Alena. “The first is a traditional venture investment and the second offers companies the opportunity to join our Dating Incubator, where in addition to cash, we offer infrastructure and consulting support.”

Alena says the company looks to invest in or acquire companies that fit Dating Group’s vision for the future of dating.

“Our vision is to enable people around the world to connect and date safely,” he explained. “We have more than 73 million users from almost 100 countries represented on all of our platforms, so each platform is tailored to the community it serves based on interests, demographics and region.”

He also added, “We are a forward-thinking social discovery company, and constantly investing in new ways to create better and more efficiently derived experiences by leveraging technology, data, and user behaviors. We believe in digital intimacy and solving the problem of loneliness. We want to build, invest in or acquire platforms where people from all over the world, all backgrounds and all ages, can meet, make friends and spend time together in the digital world — even if they never have an intention of getting together off-line.”

What Dating Group looks for in a company

Although Dating Group’s fund focuses on a specialized niche, it’s like many other VCs regarding what it looks for in a company — with some unique exceptions.

“Like most VCs, for us, the right founder is of the utmost importance,” said Alena. “I think the founder is the most important aspect of the business. We want to find smart, energetic CEOs that are committed and passionate about their startup.”

Secondarily, Alena says his group looks for products that align with its vision. “We are confident in the trajectory of our model and finding strong companies that share that vision is a priority for us,” he said.

As such, making sure your company and product align with the VC’s charter is extremely important. You might steer clear of VCs that don’t invest in business-to-business (B2B) technologies if, for example, you have a sales enablement platform.

“Once we’ve established that the founder and product share a similar outlook, we then look to evaluate if they can achieve exponential growth,” Alena added. “We’re looking for the next Tinder or Bumble.”

If you’re a founder looking for a seed round, Alena says you’ll need to come to him with a business plan and a fully fleshed-out product that’s up, live and working.

“I want to see a functional app or site before we would consider investing, but not much more is required at this stage,” he explained. “Product and vision are what we’re looking for to make a seed investment.”

Lastly, unlike most VCs, Dating Group’s venture fund also looks for companies that it would potentially like to acquire in the future.

“We want to help companies get off the ground, support them as they grow, and then bring them into the Dating Group family once they’ve achieved some initial success,” Alena said.

Avoid these red flags

But before you make that first pitch, it’s also important that you know the red flags that Dating Group and other VCs are sensitive to.

“The founder’s commitment is essential,” said Alena. “How much time, energy and passion does the CEO have for the business? I think that’s something, that in many ways, is subjective — but something I’m confident I can personally recognize.”

Alena’s group also keeps its eyes open for large, scalable businesses.

“There are a lot of dating startups that are very narrowly focused on a specific niche community — and while those apps certainly have a chance to succeed and build strong brands, they simply don’t have the upside we’re looking for,” he said. “We want unicorns!”

What if the idea is there, but the product isn’t? According to Alena, there is still hope.

“If we like the founder and the product but are concerned about experience, this would be a perfect example of a company we would ask to join our incubator,” he explained. “Here, we can offer support from every angle. Give a guiding hand on management and product, while also offering access to a myriad of resources.”

So if you’re an entrepreneur looking to be the next unicorn in dating, it might be well worth giving Bill Alena and Dating Group a call.