Firm Principles

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We are a venture capital fund focused on enabling founders of technology-enabled companies.  At the early stages of a company's creation the founders' equity is priced low, thus, offering equity creates the largest loss e.g. dilution. As such, we believe it is in the founders' best interest to raise as little capital as possible, maintain a culture of stinginess, and build as far as possible toward Product-Market Fit. Once done, a startup's valuation spikes and attracting capital based on existing traction becomes immeasurably easier from existing venture capitalists.   We have great respect for the founders who have consciously decided to forgo profitability, reaise equity from venture capitalists and grow their topline (or other metric) as rapidly as possible).  This "blitzscaling" model tendsto work best in winner-take-all, land-grab type industry verticals.  It is not a fit for all, or even most, startups playing in competitive spaces that differentiate from peers based on intellectual property, regional variations, demonstrably defensible and repeatable customer relationships.   

We are a defiant group of investors, having reached the highs and lows, we appreciate the determination and the courage it takes to start a company, especially when 8 of 10 startups (including retail) fail to survive past three years.  We want to work with any and all founders, but particularly respect and feel a kinship to those founders that have had the grit and perseverance to rise from more humble or overlooked backgrounds, like ourselves.  We will evaluate all startups founders and teams equally, but believe there is a character element that is revealed through adversity and we tend to look for that similar character trait in all of our founders.  As such, we want to work with founders from all over the US, not just the tech hubs. Increasingly, we have come to believe that diversity in gender, race, thought, upbringing, and experience hones skills that can not be taught.  Thus, we prioritize the underdog, regardless of the background, as the crucible of the merit-first competitive market rewards truly great leaders and companies equally.  We keep this at the top of our investment selection process.  We want to invest in founders from all education and national backgrounds, not just those from the Ivy League or well known educational or geographic areas.   

We are impact investors and seek to have a demonstrable and defined impact in society, namely, being a force of elevating startups that preserve and protect democracies or win the competition between adversarial states that do not share a respect for such principles, values, and accountability.  This means that while we have discretion in what we invest, we have a fiduciary obligation to prioritize returns beyond financial results thereby improving the world in a more fullsome way with a broader aperture beyond mere financial results.  That said, we expect that our strategy will naturally produce progress on a number of Impact KPIs.  Having previously set standards for, and invested in, ESG (Environmental, Social, and Governance) priorities and still seeking opportunities to achieve a more lasting legacy.  That will never dissipate and doing good never is not a stylistic fad or fleeting and temporary endeavor.  As such, we will look for opportunities to make a difference without sacrificing returns but also ensuring the greatest good in democratic leadership and societies.

We measure our success and progress through both traditional and impact KPIs.  

  Traditional KPIs are:

• IRR (and secondarily cash-on-cash multiple on our investment), with an overall target of top quartile returns but a goal of top decile results
• Percentage of investments outside of the major US tech hubs (New York City, San Francisco, Boston), with an overall target of 50%
• Net Promoter Score on companies that we invest in, with an overall target of 75.
• Number of investments we make annually per full-time investing team member, with an intial target of 12 investments

Our impact KPIs are:

• Percentage of companies we invest in which include (at time of investment) a cofounder or C-level executive that is female, with a target of 30%
• Percentage of companies we invest in which include (at time of investment) a cofounder or C-level executive who is an underrepresented minority, with a target of 40%
• Percentage of companies we invest in which include (at time of investment) a cofounder or C-level executive that has served, with a target of 30%

Our investment process: 

We respond to your initial approach within 2 weeks of applying. 

Most companies receive a quick no, which we think is better than a slow maybe. If we think that we’re a fit, our typical next steps are:

• Initial indication of interest. A 30-60 minute videoconference with one or more of your leadership team. The majority of companies do not pass this initial screen.
• A second indication of interest, within 1 week. A 30-60 minute videoconference where you can ask us any questions you like, and we will likely have followup questions. 
• Optionally, further conversations. We may introduce you to a Venture Partner who has great skepticism about your vision, precisely to ensure that we’ve given you a harder test rather than an easier one.  
• Formal offer letter, within 1 more week. Once we’ve agreed on terms, we’ll ask you to complete our due diligence checklist.
• Reference calls and other diligence, typically in a 2 week window. In particular, we’ll work with you to develop monthly revenue growth projections based on your historical financials, future growth plans, and industry average growth rates, and agreed-upon metrics.
• Invest! We sign the investment documents and fund our full investment via a wire transfer to your corporate account.

We have also invested significant resources into our internal proprietary sourcing and deal flow technology and comparison tracking.  This gives us a distinction in our proprietary data and process flows, that are unique and we believe a source of differentiation.  

We believe that these differentiators will become more obvious overtime and will be evinced in our track record and returns, as well as broader impact:

• We will build a reputation for a differentiated investing approach. This results in more relevant founders approaching us and/or responding positively when we approach them. This is one of the reasons that past outperformance correlates with future outperformance in VC.
• Our interconnected and reinforcing - and self-fulfilling - group of investments and founders is unique.  , This organic and intentional expansion has predictible  network effects, and will serve as a source of dealflow, talent, and clients for our companies.
• Over time, we anticipate we’ll develop an expertise in certain high-stakes categories that are particularly relevant to the next generation.   We intend to be the primary partner, and the venture fund of choice, in a number of discrete verticals that will become more readily apparent with the growth of hte industry.  We believe this will be extremely hard for others to replicate, despite the fact that we anticipate open-sourcing many of our documents.

 The most important factor in our decision-making is always the founding team.

• Why will you win when others didn’t? 
• Are you creative?
• Are you gritty? 
• What are each team members’ superpowers?
• Do you have a history of success in prior endeavors? (even if not in business)

The most common questions for us?

How much do you typically invest? $200K-1M

Is there an ownership requiement: We do not.  In addition, we don’t prioritize growing our stake over time. Rather, our goal is to maximize the value of our investment, which often means raising further capital sparingly and reducing dilution to the founding team. 

What rounds do you prefer to invest?  We invest in rounds of between $200,000 and typically $2m, for our initial investment into a company. 

Will you only invest as a lead investor?  

Definitely not. We have a long track record of partnering with other investors. We will coinvest with other VCs leading a round if we are excited about the opportunity.

We are also glad to include other VCs/angels in rounds that we lead. 

Note we strongly believe that it’s in your best interest to have an active, credible, and experienced lead investor. 

Do you demand a board seat?  

A board seat is not required, only where we think we can be helpful, and there is a mutual interest.

Regardless of whether we take a board seat, our goal is to be your most value-added investor during the two years after we invest. In lieu of or in addition to board meetings, we organize “working sessions.” In these sessions, we go deep with you on a major challenge. We’ve found this type of collaboration very valuable. 

Minimum investment requirements:

• Have a demoable wireframe or preferentially a product, even if you don’t yet have revenues.
• Evidence of customer demand, at market prices. We need evidence that customers will pay full price. 
• Detailed use of proceeds. A clearly defined plan on how you intend to spend the investment dollars received. The funds should be for business growth, i.e., not normally to buy out investors or fund an acquisition.
• Plan for gross margin over 40% and LTV/CAC over 3x, either today or based on a reasonable forecast
• Service providers enabling professional accounting infrastructure according to GAAP 
• A technology-enabled business. You must be doing real engineering of some nature.

Since we do not require a personal guarantee, our focus is the business’s sustainability and growth plan, not on your credit score or past credit history.