Every investor takes different types of risks.
Risks I won’t take:
- CEO that isn’t great & going for it.
- CEO that isn’t better than me.
- CEO I wouldn’t work for.
- Great founder, but she isn’t the CEO.
- Product-market fit risk. I won’t invest unless you have at least 10 Unaffiliated Customers.
- A space where getting The Next Investor feels hard even if the company hits its growth plan for next 12–18 months.
- Not intuitively clear to me how company can get to $300m ARR, in theory.
- Founders too tired.
- Founders don’t like sales.
- Crappy software that still has a lot of traction.
Risks I will take:
- Founder new to U.S., or coming to U.S.
- Founder has no network in U.S. and maybe even knows no one here.
- No management team at all, no idea — yet — where to find one.
- First-time CEO, even first-job CEO.
- Looks like there are 100 competitors — from the outside.
- Looks like the product isn’t innovative — from the outside.
- Founders don’t understand sales, or marketing.
- I don’t need social proof or co-investors. I don’t care who else has invested, if anyone. I can deliver the next round investor — if you hit the plan.
Every investor is different.
So when I finally was lucky enough to invest in Automile.com, the company had a great CEO and founders with product-market fit who was really going for it. In a market that, by growing it, could easily get to $300m+ in ARR. Bonus: super-happy customers, and net-negative churn with SMBs (which is rare).
Risks I took: CEO had just come from Sweden, a lot of revenue then was still in Europe (>50% in U.S. today), no management team, product superficially looked similar to a lot of other high-profile B2C and adjacent investments.
Fast forward today, we’ve almost quadrupled in less than a year, we have a great management team, a best-in-class product starting to dominate its core market segment, revenue that is accelerating, Salesforce as a strategic investor, and a majority of revenue in U.S.
But other investors, many far better than me, take different risks.