Building Conviction When Startup Investing

I wanted to start sharing some of my investing thesis, how I make investments, and more importantly WHY I make them. I shared the following on Twitter recently and wanted to include in my blog here.

1/ I wanted to start sharing the WHY behind investments I have made and how I built conviction.

I have been doing this for long enough that sharing some of my thinking helps, including the wins and losses along the way.

2/ I believe in people early, maybe even before they believe in themselves. I think about 3 key dimensions when looking at a company + a macro thesis I will share at the end.

After this thread I will share companies I believe in and invested in that matched my thesis.

3/ I think about 3 things when I make an investment: Team, Time, and Technology. I have written about this before but I have developed and honed this thesis over the years –

4/ The first is Team ๐Ÿ‘ซ

Why is this the team that is going to win? How do they know each other? How do they view the problem they are solving? What unique insights do they have? Are they magnets for talent? How do they attract people to an idea or a vision?

5/ Next up is Time ๐Ÿ•ฐ

Why is this the right time for this to exist? Is the world ready? Has this been tried before? Why didn’t it work? What unique market aspects make this a great time for this to be successful? What externalities or waves are they riding? Why is the world ready?

6/ Technology is key ๐Ÿ“ก

What unique technology has this company figured out? Why is this going to win against the competition, but also incumbents who have more resources? Is there scaleable and network effects driven breakthrough here? What do they see that nobody else sees?

7/ I am a fairly open book when it comes to questions and pitching. I don’t play games, and theres no tricks. I genuinely want to hear answers but I don’t think you can “prep” for a conversation about the above things; Team, Time, and Technology.

8/ Finally my macro thesis is to find someone solving a problem they experienced. A real pain that they know, and in some ways love, and understand better than anyone. They wake up every day thinking about solving it, and don’t want to live in a world where it doesn’t exist.

9/ This is what some call grit – perhaps determination or focus. It’s what keeps them and the team motivated through tough times internally or externally.

It’s what separates the people playing startup vs. the people building a long term company.

10/ When I find an amazing team, that is working on breakthrough technology, that the world is ready for at this time – I find myself wanting to spend more time with them and support them and invest. I don’t take these decisions lightly, and it’s usually a 10-15 year ride.

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