APPROACH

WHAT WE LOOK FOR

Our philosophy manifests in our approach to evaluating investments and working hands-on with the entrepreneurs we proudly back.

WHAT WE LOOK FOR

golden rules

These rules are golden for a reason. We really do prefer businesses that embrace them. So check them out before coming to pitch.

Ideas don’t make money: people do.

We care less about theoretical financial pro-forma plans than either real results or an understanding of the key drivers of the business model. High margin business models with fixed cost leverage and year-over-year repeat customers are the ones we like the best. Read more about our preferred business model.

Laser-focus on a clear niche- especially early on- increases the probability of being the best at something and being the best is always a good business model. What initial addressable customer base can you dominate? Win in your core first before worrying about adjacent growth.

WHAT WE LOOK FOR

Business Model

It’s quite simple:

Business models that have the potential to generate predictable and superior cash flow create superior value. But not everyone recognizes this simplicity: the venture industry often pushes aside this commonsensical truth by over-emphasizing growth, closing an eye to the way businesses eventually need to make money.

Recurring Revenue

Business models that have the potential to generate predictable and superior cash flow create superior value. But not everyone recognizes this simplicity: the venture industry often pushes aside this commonsensical truth by over-emphasizing growth, closing an eye to the way businesses eventually need to make money.

Fixed – Cost Leverage

We prefer costs that pay for themselves over time, and that have manageable annual CAPEX needs. As a rule, we are drawn to businesses where annual CAPEX needs are less than 10% of revenue in steady state.

Superior Cash Flow

Cash flow is king. It allows a business to invest wisely, enjoy solvency and ultimately drives its real value. Its presence and growth are the sole reason why a company is valuable. Its absence is the sole reason why companies go out of business.

WHAT WE LOOK FOR

Specific Criteria

We’re not for everyone, but neither should you be.

We zero in first on people and on areas where our reputation, knowledge and connections distinguish us from the pack. We play in the world of technology, data and design, but information services, enterprise internet and digital media are our greatest forte. Business in those fields tend to have prospects for higher quality of revenue and that’s just the kind of thing we love for long-term value creation.

PEOPLE

Passionate

Execution-Capable

Self-Aware

Business Model Characteristics

Recurring Revenue

High Gross Margins

SECTOR FOCUS

Digital Media

Business Information Services

Enterprise Internet

Opportunistically: Specialty
Consumer Brands or Services

Stage

Seed Start Ups

Goal
Build team and establish initial
proof of concept

Revenue
Up to $2 million

Bite size
$250 thousand to $1 million initial investment

Venture Start Ups

Goal
Determine product market fit
and proof of business model

Revenue
Up to $10 million and path to profitability

Bite size
$500 thousand to $6 million initial investment

Growth Scale Ups

Goal
“Fuel on fire” to gain greater share and scale organization

Revenue
$5 to $50+ million

Bite size
$4 to $15 million initial investment