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Generally we look to invest $2 million to $4 million initially, with a similar amount reserved for follow-on in a financing round of at least $5 million that includes a new or existing institutional investor. The following criteria are necessary for building great companies and long-term value and are the basis upon which all potential investment opportunities are benchmarked.
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Given the early-stage profile of companies in which we invest, we focus on the experience and capabilities of the management team. We have found that execution is the primary determinant of success. Therefore, we look for seasoned, mature leadership, in particular, in the CEO and on the technology side. Management is expected to be capable of advancing corporate objectives in the face of changes in technology and corporate strategy while facing the customary constraints in human and other resources. As an active investor, we look to bring our significant business building experience to bear in partnership with a management team open and accepting of constructive and strategic assistance. |
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We strongly prefer investments where product viability can be ascertained through actual or potential customers who have some experience with or knowledge of the product. We look for sufficient evidence that a large, growing market exists and the company's offering meets the market demand. Additionally, due to the fast changing pace of technology development, we look for companies that are differentiated through disruptive new or alternative technologies that provide measurable advances for users. Further, we look for platform oriented technologies rather than single stand-alone product opportunities. We believe it is important for a company to understand what is driving the need for the product. We often ask, "What pain is your product alleviating, and how deep is that pain?" |
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In order to generate a significant return on investment, we focus on large, growing markets. Target markets tend to fall in one of two categories: either they are quite large and experiencing major technological shifts or are they are currently small but expected to grow significantly as a new market emerges. Either case presents an opportunity to capture market share through innovation, agility and execution. In particular, we like companies that exploit niche opportunities within a larger market which provide a foothold for further penetration and expansion down the road. Further, we prefer not to evangelize a new market but take advantage of markets that are recognized and followed by industry analysts and pundits. |
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All of our investments are made with a focus on an exit strategy. Working alongside management, we give careful thought and consideration prior to making an investment, as to how the equity of the company will be monetized, be it through acquisition or public offering. In taking a "partnership approach" with management, we strive to insure that economic goals are aligned as we seek to ultimately successfully create liquidity. |
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We look for companies that have well thought out strategies that take advantage of proven business and pricing models. It is also important for a company to demonstrate uniqueness through a combination of exclusive relationships, differentiated technology, expert personnel, or other competitive advantages. In particular, we target companies that exemplify versatility to reconfigure and redeploy such assets. This helps to minimize downside risks as well as provide the company with more options as competition increases and markets evolve. |
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