September 14, 2023
At Alpaca, our Field Study program is a cornerstone of our approach to investment. But first, what is a Field Study?
Field Study: Alpaca’s proprietary process for deeply researching a particular theme or topic to understand the investable (and non-investable) areas within a space of interest.
Built internally by our team, the program has steadily grown and proven itself to be a repeatable, thesis-driven engine for deal generation. It has become a hallmark of the Alpaca way of doing business. In fact, several firms have asked us to help them replicate the process internally.
We’re excited to share how and, more importantly, why the program works.
Across funds, our Field Studies program consistently drives new leads to all our sourcing channels:
In 2022, half of the investments we made were directly related to Field Studies.
Looking at our last 40 deals, 23 were driven by Field Studies. Along with tracking this internally, Alpaca’s David Goldberg publishes an annual Where Do Deals Come From? rundown of each deal we’ve done in the previous year and how it came to us.
Why does it work? Each Field Study conducted by our team drives the following outcomes:
So how do we conduct one of these? A new Field Study begins with a partner identify an interesting, potentially investable area of the market. By focusing on a specific theme, we are able to be very targeted around the deals that we look at and the strategic networks that we build. This allows us to not only uncover opportunities through our research and outreach, but also to establish a reputation as experts.
Once we’ve identified an area of interest, we spend three to four months speaking with investors, founders, customers and incumbents in that space to understand the dynamics of emerging technology, adoption and what the future holds. The Alpaca MBA Associates program is a key component to this stage in the Field Study process. Selected from top programs such as Wharton and Harvard to work closely with our general partners and investment team, each MBA Associate contributes significantly to at least one Field Study during their tenure with the firm. Along with secondary research culled from industry sources, our team conducts in-depth primary research by speaking to founders, VCs and other leaders.
This research phase typically runs 90–120 days into the identified market, which can be on a macro or micro topic. For example, Alpaca’s Global Supply Chain Field Study led by Aubrie Pagano was actually a multi-year investigation encompassing five distinct, but closely-related studies into different aspects of the supply chain.
From this research, and speaking with dozens of industry players, customers, and startups, we produce an extensive deck (20–40+ pages), market map, and deep analysis outlining our market insights and findings about the investable opportunities we believe exist in the space. We then publish the completed Field Study to the broader market via our digital channels (see below for examples).
Next, we amplify the reach and visibility of each Field Study online and offline by hosting dinners, virtual panels, and branded events on our conclusions that bring together our community around focused conversations. The result: founders and co-investors alike know they can reach out to us about the specific areas featured in our Field Study program.
While timing does vary from study to study, here’s a week-by-week rundown of our typical Alpaca Field Study process:
Objective: attract and engage founders, investors and thought leaders in the space.
Actions: announce new topic to our networks through a blog post, social media, firm newsletter, personal networks and word of mouth.
Objective: get educated and build relationships.
Actions: reach out and schedule calls with thought leaders, investors and entrepreneurs to conduct a high level macro-overview and uncover industry trends. When speaking with incumbents to determine industry dynamics, we ask things like:
Objective: conduct intensive research.
Actions: build data sets using both a bottoms up analysis and a top-down approach to identify all startups in the space, break down existing processes to determine which parts of the workflow startups are tackling, understand the solutions at play and hypothesize which types of technologies can play a role in changing the market dynamics. We find that hypothesizing at this stage results in less prone confirmation bias later. We also define the Total Addressable Market (TAM) by asking:
Objective: categorize companies by “modules” or by business model and understand the pros/cons of varying business models as part of the Market Map creation process.
Actions: document modules and business models in the sector and build out handful of company profiles to show varying examples of what’s at play in the market. Use these findings to build out a comprehensive Market Map. Next, we ask:
Objective: take learnings and form opinions.
Actions: as a team, we work to use what we’ve learned thus far in the process and translate them into opinions. Both internally and to industry experts, we aim to test our original hypothesis to determine wither it’s valid or invalid. We ask:
Objective: publish our findings.
Actions: we format, design, edit and finalize Field Study content in preparation for publications. An Alpaca Field Study includes three deliverables:
Objective: present findings in a “traditional presentation” format to key audiences of interest. The format differs some depending on the research, findings and sector. In each case, we aim to curate an event that will put our research in front of the right audience at the right time.
Actions: organize, host and promote an event for a key stakeholder audience. The event could take the form of a virtual fireside chat featuring industry experts, a private presentation for our LPs or an in-person gathering bringing founders, operators, investors and experts together to connect. For example:
LP Event: Many Field Studies are driven by interest from our LPs. In order to provide them thought leadership and insights, we present our Field Study research to them by hosting an exclusive in-person dinner or hosting a virtual presentation.
VC Community Event: In some cases, we present our findings to the VC community through a live networking event. This further builds our connection to and reputation in the space. Co-investors, founders and experts in the ecosystem know where we are spending time and will keep us top of mind for relevant opportunities in the space.
Objective: leverage research for ‘highest and best use.’ Field Studies can be monetized in four forms:
By the time of publication, our team has often identified immediately investable opportunities. Other times, we keep this research in our back pocket. When that killer deal comes across our desk, we are more apt to move quickly and potentially win the deal.
Deals are not the only investment outcome of this work. Sometimes, a Field Study’s value is the opposite: we build research-based conviction around the areas where we do not want to invest. When this happens, our team is primed to pass quickly and early on new deals instead of spending time evaluating opportunities that are ultimately unbackable.
We also see additional leverage and value in continuing to promote Field Study content as part of the brand-building process. In addition to publishing our findings and sharing them with key stakeholder audiences through presentations and live events, we promote our Field Studies through additional ongoing outreach. This includes:
At each stage of the process, we endeavor to reinforce our team’s standing as potential thought leaders in the Field Study’s given sector and continue to build connections and generate inbound leads as a result.
The best way to keep up to date with Alpaca Field Studies is to subscribe to our newsletter, The Rundown, or follow Alpaca on LinkedIn. For a deep dive, you can find all Alpaca Field Studies here. Below, we share a few recent and notable Field Studies.
Led by David Goldberg
Generative AI is one of the hottest topics on the block. Every day hundreds of startups are launched in this space. We launched this study to unpack what the generative AI landscape looks like — and how we intend to evaluate opportunities.
Led by Aubrie Pagano
Brand discovery is broken, and yet more crucial than ever for companies to crack in order to stay competitive. Starting with an industry survey, we’ve cataloged trends — and solutions — in our first Brand Discovery Report.
Led by Daniel Fetner and Ryan Freedman
We investigated the Environmental, Social, and Governance (ESG) standards that are tightening across the Real Estate industry. We believe the sector will require innovative data capture, analytics and reporting tools to meet them. We continue to actively monitor the space.
Led by Aubrie Pagano
This five-part study, spanning more than a year, ultimately honed in on three key areas: enabling Amazon Prime-like delivery for emerging brands (Part 2), end-to-end software solutions that enable cross-border sales (Part 3), and end-to-end solutions for e-commerce returns and circularity (Part 4). We invested behind two of the three themes so far as well, with investments into a cross-border, asset light global 3PL, Mayple; and the returns-to-recommerce platform, Arrive. More potential deals are in the works.
As a firm, the Alpaca team is continuously conducting Field Studies.
Shoot us a note at [email protected]. We’d love to hear from you.
To keep up with the latest from Alpaca, connect with us on Twitter, Instagram, and LinkedIn @alpacavc, subscribe to our bi-weekly newsletter The Rundown here, or by reaching out directly to [email protected].
Alpaca VC Investment Management LLC is a U.S. Securities and Exchange Commission-registered investment adviser. Alpaca VC Investment Management LLC is committed to diversity and inclusion in the workplace. We prohibit discrimination and harassment of any kind based on race, color, sex, religion, sexual orientation, national origin, disability, genetic information, pregnancy, or any other protected characteristic as outlined by federal, state, or local laws.