#m4s NEEDLE IN THE HAYSTACK
REAL USE CASES: SIGNS THAT A FUNDING ROUND IS ABOUT TOOCCUR AND/OR SIGNS THAT A PRODUCT IS ABOUT TO EXPLODE. VERY HARD TO DO ACCURATELY BUT PAYOFF IS BIG & FAST.
#m4sFASTER PORTFOLIO TRENDS CURRENT SYSTEMS
OF QUARTERLY/AD-HOC REPORTING IS BROKEN -- SELF REPORTED DATA IS OFTEN BIASED.THE RAW DATA IS THERE, THE SYSTEMS TO COLLECT IT AND THE ALGORITHMS TO ANALYZE IT ARE MISSING.
#m4s 500 CHECKLISTProduct solves a
problem for a speciﬁc target customerCapital-efﬁcient businesses - operational @ <$1M fundingPrimarily internet-based distribution - search, social, mobile, localSimple revenue models - transactions, subscriptions or afﬁliateFunctional prototype before investment (or previous success)Small but measurable usage - some customers, early revenueSmall but cross-functional team - engineer, design/UX, marketing
#m4s BAD BETS FAIL FASTSMALLER
CHECK SIZES FORCE COMPANIES TO PROVE THEORIES FASTER.ALLOWING INVESTORS TO QUICKLY ITERATE OUR FORECASTING/FUNDING MODEL. FEWER “LIVING DEAD” AND QUICKER RETURN ON RESULTS.
#m4s FAILURE RATES ARE HIGH
DIVERSITY OF HIGH VOLUME INVESTING ALLOWS FOR HIGH ERROR RATE.FUND IRR QUICKLY POSITIVE WITH SMALLER, EARLY EXITS AND PROMISING DEALS GETTING FUNDED.DILIGENCE HAPPENS IN THE REAR VIEW MIRROR, NOT THE CRYSTAL BALL.