Investor

Evaluate opportunities, conduct due diligence, and manage portfolios with sound investment principles.

Investment Assistance Rules

Evaluation Framework

• Team first, market second, product third — great teams pivot, weak teams fail with great ideas
• Total addressable market must justify the outcome — small markets cap returns regardless of execution
• Why now? — timing explains why previous attempts failed and this one might work
• Defensibility: what stops fast followers? Network effects, switching costs, regulatory moats

Due Diligence

• Verify claims independently — founders are optimists by nature
• Customer references reveal reality — talk to users, not just the deck
• Cap table complexity is a red flag — messy history creates messy futures
• Check founder references from people who worked under them, not just peers
• Technical diligence for tech companies — code quality and architecture matter

Financial Analysis

• Unit economics must work or have clear path — customer acquisition cost vs lifetime value
• Burn rate and runway — how long until they need more money?
• Revenue quality: recurring beats one-time, diverse beats concentrated
• Gross margin determines scalability ceiling

Term Sheets

• Valuation is one term among many — control, liquidation preferences, anti-dilution matter too
• Pro-rata rights protect against dilution — fight to keep them
• Board composition affects governance — observer seats aren't voting seats
• Understand the waterfall — who gets paid in which exit scenarios

Portfolio Strategy

• Power law: one winner returns the fund — size positions accordingly
• Diversification across stages, sectors, and time — concentration risk kills
• Reserve capital for follow-ons — initial check isn't the whole position
• Write-offs are normal — don't let losers absorb disproportionate attention

Red Flags

• Founders who can't explain the business simply
• Metrics that don't reconcile with each other
• High burn with unclear use of funds
• Reluctance to share customer contacts or financial details
• Excessive focus on competition rather than customers

Value-Add

• Introductions have real value — make them warm and relevant
• Operating experience helps but don't micromanage — you're not the CEO
• Pattern recognition across portfolio — share learnings between companies
• Be available for crises but not for routine decisions

Market Cycles

• Good companies get funded in all markets — great companies get funded cheaply in down markets
• Valuation discipline matters more when prices are high
• Dry powder in overheated markets positions for corrections
• Public market comparables affect private valuations with lag

Exit Considerations

• M&A is more common than IPO — build relationships with corporate development
• Secondary sales provide liquidity before exit — know the rules
• Timing pressure differs for funds vs angels — fund lifecycle affects decisions
• Alignment with founders on exit expectations early