New Investment Checklist (2017)

Below is my current working pre-new investment checklist.

Most of these questions are answered early through conversations with the Founder or others at the company – so this is mainly a final reminder of what qualities I’ve found to be important in potential investments over my time at True (either through others or learning directly the hard way)

Would love any feedback on any potential new qualities to add (or questions about attributes on the list that you’d disagree with)

New Investment Check List

Founder Questions:

1. Who is the main protagonist Founder that you’re backing?

a. Are there any potential trust issues?
b. Would you want to work with this person for the next 12+ years?
c. How do they treat other individuals? (Lawyers, employees, etc)
d. Do they have the ability to be a long-term leader for the company?

2. What do they understand about the market that other don’t?

a. What experience led to that unique insight?
b. Why would others think they’re wrong?

3. Do they have the ability to recruit great talent?

a. Who are their co-Founders and how is equity split?
b. Who are early advisors and why are they excited?
c. Can they identity the people they will hire for their first 10 roles?

Business Questions:

1. Does the company’s mission matter?

a. Will you be proud to talk about this investment?
b. Can it inspire employees, future investors, etc

2. What is the company’s long-term sustainable competitive advantage?

a. Network effects are ideal
b. Are there features that increase customer lock-in or switching costs?
c. Is this a company that could exist for 100+ years?

3. Are you swimming with the tide long-term?

a. What are the major macro market forces in your favor?

4. Why is this possible now?

a. Why would have previous attempts failed?
b. Either technology or capital efficiency story
c. Why would others say this business won’t work now?

5. Is there significant innovation around product?

a. 10x better than alternative products
b. Are there any alternatives that could be indirect competitors?

6. How often do customers interact with the product?

a. Ideally more than once per day

7. What is the quality of the company’s future revenue?

a. Visibility or predictability of revenue matter
b. Recurring or Re-occuring revenue is ideal
c. Arbitrage doesn’t usually lead to long-term enterprise value
d. Any customer concentration issues?
e. Any partner dependencies?

8. Is there a path to $100m in Annual Revenue? $1 Billion in Annual Revenue?

a. At scale, what is the customer + margin profile of the business?
b. What is the profile + challenges of similar businesses at scale?

9. Is there significant innovation around early go-to market strategy?

a. Organic marketing is best
b. Are there channels to effectively reach your target customers at scale?

10. How much equity capital is required to scale the business?

a. Are there alternatives financing sources if more capital intensive?
b. Can you make money as a seed investor?

Most Important Question:

1. If you could only make one investment this year, would this be it?

Crypto Asset Analysis + Seed Investments

Presentation from our Annual Team Offsite at Stinson Beach in July 2017 included below.

This shares some of our internal discussions on how we’re starting to think about evaluating new types of crypto projects + assets.

As an active investor in startups built around open source software, we’re increasingly excited about new + interesting business models to support community activity and have been participating in the cryptocurrency space since started accepting Bitcoin in November 2012.

As a firm focused on pre-seed and seed investing, we believe there will continue to be opportunities for venture capital firms to invest the initial startup capital into new crypto projects (as part of an initial equity financing or as part of an agreement in exchange for future protocol tokens.)

We’re interested in potential opportunities in:

  • Decentralized applications (ie projects like FunFair for Decentralized Gaming)
  • Enabling infrastructure (ie projects like 0x (Decentralized for Trading Tokens) or zCash (Blockchain + technology focused on privacy + selective transparency)

In particular, in potential crypto investments we’re looking for:

  1. Applications that truly need to be distributed (“Need to be built on a blockchain”)
  2. Solid technical team (with expertise across Internet infrastructure and crypto)
  3. Utilization Token tied to business model
  4. Potential for Strong Network Effects

If you think you’d be a fit with our portfolio based on the above information, please reach out – it’d be great to learn more.

True Science Investments

Presentation from our Annual Team Offsite at Stinson Beach in July 2017 included below.

This shares some of the lessons from our investments involving life sciences (starting with in 2011 + Moleculo in 2012) as well as some of the evaluation criteria we think about for potential future opportunities.

As a firm, our focus is leading the first institutional round (usually pre-seed or seed) with investments of $500k to $3m. We often invest with angels and love research work coming out of universities or other labs.

For companies based in core science or research – we like to see:

  1. Great science with large potential impact
    1. Therapeutic applications in healthcare
    2. Other non-healthcare applications with high margin potential
  2. Founder is a leader in the space
    1. Ability to develop cornerstone IP + reputation in the space
    2. Multi discipline teams; cross discipline individual expertise
  3. Path to efficacy (or similar metric) on less than $10m of paid in capital
  4. Market size + Product + New Type of Regulatory Risk
  5. Platform opportunity with large market potential
    1. Ability to build defensible data moat is key
    2. More data makes technology better; increases enterprise value

If you think you’d be a fit with our portfolio based on the above information, please reach out – it’d be great to learn more.

Gaming Mechanics and Actionable Insight in Healthcare

To wrap up the first series of themes at the Intersection of Health, Wellness, and Technology – I’m going to briefly talk about two trends that have been applied in technology but haven’t yet made it into the healthcare world – Actionable Insights and Gaming Mechanics.

Continue reading Gaming Mechanics and Actionable Insight in Healthcare

Helping the Cost-Concious Patient

To continue deeper into the intersection of health, wellness, and technology theme – we’re going to discuss opportunities around the cost-conscious patient.  Much like eBay and Amazon brought efficiency to the traditional goods marketplace, we’re going to see a great push to make healthcare products and services cheaper through better efficiency and visibility into pricing and options.

A recent Kaiser Family Foundation report found that 30 percent of Americans have had trouble paying medical bills in the past 12 months. Even worse, the same survey reports that 52 percent of those surveyed reported that the amount they paid for their families healthcare and coverage has increased over the last year. Just under 25 percent reported that their healthcare costs had “gone up a lot.”

Beyond public outcry for help, this has driven a large portion of Americans to healthcare self-rationing: with 40 percent of people in fair or poor health did not fill a prescription in the past year due to cost.

This same sentiment was echoed in a March 2010 Harris Interactive Healthday study in which 71 percent of Americans said were worried about rising healthcare costs. However, even more telling may be people’s perception of who’s to blame for rising healthcare costs, with over 60 percent of Americans blaming healthcare costs on the profits of insurance and prescription drug companies and 50 percent of Americans blaming hospital costs. Only 18 percent of Americans point to their own use of medical services as a prime cost of their healthcare bill.

This data points to a system where health stakeholders need to get more patient-centric, working to truly focus on designing services and products around health citizens’ demands and requirements, and enabling consumers to take charge of their healthcare decisions.

Continue reading Helping the Cost-Concious Patient

The Big Opportunity in Medication Adherence

For the first of the deep dive verticals in the Technology and Wellness theme, I wanted to write about the opportunities in increasing medication adherence in patient.  Surprising to most – patients not taking or missing is a widespread and costly issue for the United States and Globally.

Specifically, according to the Center for Technology and Aging, of the 3 billion medication prescriptions issued annually in the U.S., 12 percent are never picked up by the patient and 40 percent are not taken correctly. More startling, non-adherence is responsible for up to 69 percent of medication-related hospital admissions and 23 percent of all nursing home admissions annually, emphasizing just how important it is for consumers to follow their medication guidelines.

Continue reading The Big Opportunity in Medication Adherence

Customer Experience at the Intersection of Health, Wellness, and Technology

Since joining True Ventures earlier this June, I’ve been drinking from the proverbial firehose – learning tons about the venture capital business, meeting with amazing entrepreneurs, and simply learning from the great team around me.  Since joining, we’ve completed a great number of follow-on financings, I’ve spent some time working within our portfolio on marketing, and even sourced a new deal with Kiip.

Moving forward, I’m going to be spending more time researching markets for outbound deal sourcing.  With Twitter and previously resulting in some interesting leads – most recently 60Mo & eBerri –  I figured the best to start this would be to post my thoughts publicly on my blog for feedback, criticism, and recommendations of where to dig further.

The first of these themes is: Customer Experience at the Intersection of Health, Wellness, and Technology.

While at the University of Florida, I worked on a class assignment that focused on marketing for a new healthcare startup, Voalte, based in Sarasota, FL.  Voalte is an awesome new company focused on redefining point of care communication at hospitals – by proving a robust and easy-to-use workflow App for Doctors and Nurses – on top of everyday mobile platforms.

When the team first started Voalte, they talked to the CIOs at major hospitals across the United States as part of their customer development process and asked all of them the same question:  “If you thought about all the vendors that you deal with, who would you say ‘gets it right?’”

The most common answer taken directly from the team on the Voalte Blog:

Over and over the response was a blank stare and the occasional “What do you mean?” (expressed in a tone of “you mean there’s an alternative?”) or the usual “They all suck.” The most telling response came from an IT director who told us that he deals with over 600 vendors and not a single one stands out above the rest. This came as a shock to us. For me personally, it was especially disappointing that there was no healthcare equivalent to the “Starbucks experience,” so to speak.

In most cases, this experience extends beyond the hospital enterprise and directly to consumers.  From my own personal experiences, my father was recently diagnosed with diabetes and has begun a daily regimen to track his blood sugar and food he eats.  For lack of better options, he does this using pen and paper 5 times a day – no way to search, analyze data on the backend, or upload it to his medical records easily.

Continue reading Customer Experience at the Intersection of Health, Wellness, and Technology