Criteria

We summarize here the Platonic ideal of investments we make. That said, there is an exception to every rule, and most of our investments will violate one or more of our guidelines.

Our focus is “investment tech”: companies which help investors generate alpha, operate more efficiently, or acquire new clients.

Our typical initial check size is $200,000 to $1,000,000. We do not typically lead rounds. We can make follow-on investments into our companies where helpful. We invest at later stages primarily when a new investor is leading the round. Regardless of stage, if your company fits in our sweet spot, contact us; we have relationships with many other investors in our sector.

We’re particularly excited about businesses which:

• Target niches, no matter how small, but especially if they have logical adjacencies.
• Operate in “boring” spaces, not in the limelight of traditional VC.
• Solve “dual PhD problems”: companies at the intersection of more than 1 domain.
• Are capital-efficient, targeting 40%+ gross margins.
• Can easily be turned profitable, even if you do not manage the business for profitability in the near future.
• Plan to use our capital to double down on a proven model, or enter a logically adjacent market.

We are decidedly interested in working with teams:

• With “Founder-Market Fit”. You’re obsessed with the problem you’re solving, fit into the target market, and have some relevant experience.
• Focused on product, market, and business model, not press coverage and VC funding.
• Sensitive to managing their capital table efficiently, e.g., successful second-time founders who realized they only owned a small percentage of their company at exit.
• Obsessed with understanding and implementing Standard Operating Procedures (“S.O.P.s”). We think founders should approach new business models and industries creatively, and simultaneously, take advantage of existing best practices.
• Hailing from non-traditional backgrounds: women, racial minorities, top talent from state schools, etc. We like people with something to prove.
• Based outside of the major US tech hubs (i.e., New York City, Boston, California).
• With international roots, including immigrant founders and engineering based outside of the US. For more on this, see Why VCs are investing in international startups and Why international startups love NY.

It is unlikely that we’ll invest in companies with any of these attributes:

• Pre-product. We’re focused on companies which have already shipped a product that customers love. Your product is incomplete, buggy, and ugly?  If people are still buying it, that proves the value of what you’re doing.
• Not a US Corporate structure (C corporation, S corporation, LLC)
• Not a technology-centric or tech-enabled company. We don’t need breakthrough technology, but you should be rethinking from first principles how to use modern technologies in all aspects of the business. One of the reasons startups win is that they don’t have legacy tech stacks; they can design the business around modern best practices.
• Blitzscale market: one with “winner take all” or “land grab” dynamics. These tend to reward the company that raises the most venture capital, and we’re not playing that game.
• “Use of proceeds” is “Achieve a milestone that helps us raise more VC”. We always ask what you’re going to do with our investment that you couldn’t do otherwise. If the answer is, “Achieve growth that will attract top-tier VCs”, we’re not a great fit to invest in your company. To be clear, if you want to raise traditional VC, we’ll support you! But for the companies we invest in, we think the #1 goal is to build a healthy, self-sustaining business.
• CEOs who spend a lot of energy meeting VCs and attending startup conferences. We’d much rather talk with management teams who spend time at the conferences which their clients attend.
• Founder’s goal is to build a company with a few million in revenue. We want to work with founders who want to build legacy-defining, generational companies.

We’ve shared below our formal evaluation rubric. Few of these are absolute obstacles, but each of these reduce the odds we’ll invest.

	Criteria	Sample red flags
PEOPLE	Leadership team	No work experience together Not focused on the core business, too many other obligations No directly relevant experience, which implies a similarly competent team could replicate traction in even less time Close-minded/overconfident
PRODUCT	Product	New features, not a business Don’t control core IP; not introducing any new protectable IP Technology is not core to the business
	Challenging problem	A vitamin instead of a painkiller
MARKET	Market	3rd party dependencies, e.g., on uncontrolled distribution channels
	Traction	High customer churn Vendor-pushed Proof of Concepts, instead of client-pulled Overconfident understanding of IP as a differentiator
	Revenue potential	Targeting shrinking market Won’t withstand use of other technologies coming soon to market
FINANCE	Business model/ financial model	Financial model missing or poorly thought through $ raised to date exceed trailing cumulative revenues
	Valuation/ structure / Deal dynamics	Excessive structuring Poor support from existing investors: not following on, or not using pro rata

We invest based on the merit of opportunities presented, without regard to race, religion, national origin, age, sex, marital status, sexual orientation, or any other basis.