My approach to venture investing
Ever since my partner Brad wrote a great piece about how he invests, I’ve wanted to create a similar manifesto. I’ve seen the value that founders get from reading Brad’s post before connecting with him, as it provides a valuable window into his culture, mind-set, priorities and passions. I will endeavor to achieve a similar objective.
Passion for the mission
I personally see somewhere between 1–2k potential investments per year. If someone sends a note and an investment deck that is personally addressed to me, I will respond every time. My belief is that it is both hard and admirable to start a company, and that if someone thinks enough of me to share their business or idea, then the least I can do is read the materials and reply. However, I have a pretty rigid rule: if I’m not specifically passionate about the problem being addressed, then I won’t engage. The last thing I want to do is waste a founder’s time if there is no chance I’ll dig into, much less invest in, their business. And it isn’t fair to me, my existing portfolio founders or our investors if I’m spending time on stuff that doesn’t fit with my personal mission. Finally, founders deserve investors who are closely aligned with them, and are as excited about the business as they are. And if I’m not that investor, then I always counsel founders to find a better fit. So what am I passionate about? Well, I’m a sucker for all things in the realm of alternative finance. My investments in Simple, Transferwise, and more recently Octane Lending, are examples of this. I also like information businesses which exhibit data network effects. The Trade Desk and Cognitive Logic fit this mold. And complex, real-time analytics at scale are also interesting to me, as MemSQL, Recorded Future and Sight Machine demonstrate. This is by no means a comprehensive list, but it is indicative of where my head is at today.