INVESTMENT CRITERIA

We look for the following in a business:
 
  • Address a real need (preferably already existing and understood), that is large and expanding rapidly, and driven by technology- and/or culture-driven disruptions that

     are difficult for incumbents to respond to.

 

  • Possess an underlying technology with a unique, scalable, and replicable business model that can extend its advantage as the business grows (i.e., technology learning curve effects, operating model knowledge and skill based advantages, network advantages, advanced analytic supported insights, strategic partnerships, etc.).

 

  • Explicitly addressed all ‘show stopper’ business model defects (i.e., access to raw materials, critical skills, proven customer demand, etc.).

 

  • Can achieve attractive economics within three years after securing the initial capital contribution, ideally:

    • Proof of concept within 6-12 months.

    • Achieve revenue generating commercial operations within 1-2 years.

    • Become cash flow positive within 2-3 years.

    • Has the potential to generate 25%+ annual returns.

    • Has the potential to return a significant share of the initial capital investment within 3-5 years.

 

  • Contributes a social benefit that is meaningful and measurable, e.g., carbon footprint reduction of 30%+ relative to traditional coal and oil based alternatives, enables solutions that accelerate adoption of environmentally friendly regulatory standards.

 

  • Is committed to building a high performance operating model that has been empirically proven to achieve dramatically higher impact and potential for success and durability:

    • Fanatic Discipline – a clear but flexible business plan, simple operating model, and customer centered learning approach to systematically make a steady and consistent progress against the 3-5 most critical priorities.

    • Empirical Creativity – Ideally, 2-3+ customer/market trials that diversify risk while testing out which opportunities deserve the most management time and financial investment.

    • Productive Paranoia – Enough capital and cash flow to withstand 24 months of operation, understand primary risk with contingencies to address delays of 6-12 months, and avoid ‘bet the farm’ risks.

 

  • Proven business building leadership team – 1-3 person team that:

    • Brings together the most critical core competencies for success.

    • Operates as a highly collaborative team.

    • Secures the confidence and trust amongst investors and business partners.

    • Inspires focus, productivity and commitment amongst company associates.