Focus

We look for companies in the fields of information technology and the life sciences. Specifically, Software As A Service (SaaS) and focus on unique data sets and analytics.  In essence, we look for teams that are committed to solving a real problem with a novel approach. The criteria listed in this section are key to our evaluation of any opportunity because, in our experience, they have proven to be essential ingredients of successful companies.

A great plan is one which can be explained easily with a clear statement of the business proposition without losing its attractiveness. If a company’s plan is not simple enough to be described in two sentences, it probably is too complex to be communicated effectively to customers, employees and shareholders

Questions to consider

  • What business is the company in?
  • What business problem do you solve?
  • What is the company’s mission?
  • Is the idea powerful enough to be the solid foundation of a big business or could it simply end up as a feature of someone else’s product?
  • Is the path to market plausible for a new entrant?
  • How will the company be financed, not only initially but all the way to self-sufficiency?
  • What are the key milestones that must be achieved on the company’s path to success?
  • How will the company be valued if it is successful?
  • What is the likely exit strategy for investors?

What is the Opportunity

We like companies focused on markets that are already very large and profitable or that are expected to experience explosive growth. We seek to invest in the companies that will be market leaders in well-identified market segments.

Questions to consider

  • How long will it take for the business to generate $100 million in annual sales?
  • What market share will it have to obtain to achieve those levels of sales?
  • What size organization will have to be built to achieve these sales levels?
  • At what stage does the business become profitable?
  • Who are the key competitors?
  • How is the new company going to effectively compete with incumbents and new entrants? 

Problems

What is the serious problem your company is trying to solve? Is it significant? Or are you betting on a solution looking for a problem. If the problem is significant, why is it not being addressed by existing players?

Questions to consider

  • What evidence is there to suggest that there is a pressing need for the solution?
  • What cost would customers attribute to this problem and what value to the proposed solution?
  • How is this need being addressed currently and why is this not sufficient?
  • Has this need been recognized by industry groups, standards bodies and incumbent vendors?
  • How significant and costly is the change required to embrace the proposed solution? 

Target Market

We also want to know specifically who is feeling the pain caused by this problem and how many such people are out there. For products sold to businesses we like management teams that are able to talk about specific people in specific roles at specific companies that have decision-making power and would pay for the solution provided by the company. Where appropriate, we also like to see strong evidence from market research, testing or ideally a prototype or beta release that potential customers will really value the proposed solution.

Questions to consider

  • What value do customers place on a solution to the problem the company is addressing?
  • What departments and officers have budgets specifically allocated to solving the problem?
  • How will the customer’s job change if the problem is solved?
  • How long is the sales cycle?
  • What are the customer’s key criteria in making a purchase decision?
  • For use cases, what evidence do you have that this product or service will meet real customer demand? 

Advantage

How is your approach to solving a problem different from other ones out there? Are these differences important? Do they bring you a sustainable competitive advantage?

Questions to consider

  • If the need the company is addressing is so great, why is no one else offering a compelling solution?
  • Are the product’s advantages compelling enough to outweigh the customer’s preference for continuing to deal with its existing, established solution?
  • What is the source of the company’s differentiation?
  • How can this source of differentiation be protected and enhanced over a long period of time? 

Experience

We look for entrepreneurs who are aware of the challenges they are facing and who do not seek to conceal them. On the contrary, they know what they are good at and they are looking for partners who can make up for their shortcomings and help them to address and overcome these challenges. This type of self-awareness and realism usually comes from years of experience and lessons learned.

Questions to consider

  • What are the key risks facing the business?
  • Which of these risks could be fatal to the business?
  • What partnerships could help the company mitigate and address these risks?
  • What alternative paths are available to the company if a major risk materializes? 

 Capital Efficient

CEOs should set the example for their employees by drawing modest salaries and by saving money in all areas that are not critical to the company’s mission.

Questions to consider

  • How will the company conserve cash and get all of its employees to think like owners of the business?
  • How will the headcount grow over the next 18-24 months?
  • Which companies are likely to be the best sources of talent to recruit?
  • What compensation packages does the company intend to offer employees at various levels of the organization?
  • Are the incentives of key executives, founders and investors aligned?

Energy and Passion

The founders must have sufficient energy, passion and conviction to carry them through the ups and downs they will inevitably face. They must also be able to communicate this enthusiasm to their employees in such a way that it becomes contagious and part of the company’s culture.

Questions to consider

  •  What essential elements define the company’s culture?
  • Which objectives are shared by the entire organization?
  • Is the company vision clearly communicated to and understood by all employees?
  • If all employees are not located in one place, are the right employees located in the same place as each other?