WHAT WE'RE LOOKING FOR
World-class Entrepreneurs: In our experience, our success has been based on backing the right management team. We’ve learned that we have to work with entrepreneurs who we trust, respect and enjoy being around. We’ve all been entrepreneurs and take some measure of pride in understanding the company-building process and the personality it takes to do it well.
Companies in Three Sectors: The best way to deliver value as a partner to an entrepreneur is to be focused in his/her sector, and bring a network of connections and an educated perspective. We would never presume to know more than one of our teams about their industry, but we do have the ability to see the entire landscape from our vantage point. We are looking to help build companies in financial services, media and healthcare.
Big ideas: Every company has risks, however modest or audacious its goals. While those risks tend to dissipate with maturity, they never go away. Given this, our preference is to fund companies where, if we all succeed, we have a chance to create an extremely valuable enterprise. That’s not to say that one shouldn’t have a niche strategy at the outset, to establish some market penetration, but ultimately we like to back entrepreneurs solving big problems.
Opportunity to Own a Sizeable Stake: We think it’s in everyone’s best interest to have our portfolio companies matter to us. Our goal is to own at least 20% of each of our portfolio companies, which means that we have a serious stake in their success. We understand that this means we have to take the risks associated with coming in early, and we welcome that.
Geographic Bias Towards Less Competitive Markets: Over 50% of venture capital is invested in the San Francisco and Boston metro areas. Less than 10% of our portfolio is in those two regions. This isn’t because we don’t think there are great entrepreneurs in these venture centers; there clearly are. It’s our view that they are very well served by the hundreds of VC firms located there, and that the highest, best use of our capital is to find entrepreneurs in other markets.
Low Co-investor Risk: The other major factor that emerges when we analyze our past successes and failures is that venture capital investors squabbling amongst themselves, or disagreeing on strategy or fundraising tactics, can bring even a good company down. We therefore like to invest alongside groups that we know, and whose behavior we have some ability to understand and predict.
You can find more information on our investment criteria
here.
