We take a very qualitative approach when we evaluate potential investment opportunities. The company is typically very early in its journey; there is generally no revenue, no material business metrics nor obvious signals of success, and oftentimes it's even pre-product. So we drive a series of conversations in an attempt to create mutual trust and belief.
We do evaluate a company through a prioritized set of criteria, with the first and foremost being Founders, followed by Market opportunity and ending with Product or technology strategy. We do this knowing first-hand that if we have found the right founders in the right market, then even if it becomes apparent that they’ve got the wrong initial product vision, they can learn, iterate and figure out how to create value. We've done that ourselves.
We often joke that the first few years of building our startup Brightcove (NASDAQ:BCOV) was like meandering in the desert. More than once we saw, off in the distance, a viable product concept and business model, but as we marched closer and closer to this perceived "oasis," we would suddenly realize it was a mirage.
But we'd pick our heads up, review what we had done and learned, iterate, look around and head off on a new path.
We believe deeply that a team that embraces customer discovery and continuous learning can figure things out (eventually!). And along that journey, we hope that by sharing our experience we can help point out the quicksand traps and lend you our binoculars to bring some foresight on the journey ahead.
We present to you our expanded evaluation criteria when meeting new teams and work toward building conviction.