When evaluating a pitch, investors have standard guidelines for formulating an investment decision. Beyond the required basics, below are specific elements, unique to our investment philosophy, that we particularly take note of.
Laser-like focus, particularly at the early stages, is critical and can sometimes mean the difference between survival and failure. In today’s distraction- filled world, it is very easy to lose focus. This is easier said than done and requires will power, mental strength, and discipline. A lack of focus is a sign of a weak strategy, uncertainty of where the business is headed, and entrepreneurs must learn to filter out noise that deviates the company from its mission. The best pitches paint a clear and vivid path to success.
Building a business hinges on the successful execution of a grand vision. We love bold ambitious plans, but we also like simple and realistic. I keep my eye out for how in touch with reality entrepreneurs are. Are they aware of the many challenges that lie ahead? Do they understand the assumptions behind their numbers? Do they realize that building and growing a business is a marathon and not a sprint? It is a fine balance of optimism and realism.
3. WELL-ROUNDED TEAM
Strong, complete, complementary founding teams. Weak and incomplete teams inevitably lead to failure. We specifically look for complete teams where each member is handpicked for a specific role, and has the skills and experience to make an impact. Great teams are complementary in skill sets and reinforce each other’s strengths. We look out for any signs of dysfunction or fragility that could be detrimental in times of difficulty.
We are looking for indications of a breakthrough. Some call it momentum, others use the term traction. Whether by overcoming a challenge, proving the model works, achieving productmarket fit, or demonstrating a defensible and sustainable competitive advantage.
Because of our active, hands-on approach, we cannot ignore the importance of chemistry when evaluating an investment. While we understand that it takes time to build a relationship based on mutual trust and transparency, the first meeting or pitch can be very telling. We challenge an entrepreneur’s assumptions, test their hypotheses, and offer advice. How they engage is a good indicator of the likelihood of a productive and collaborative relationship moving forward.