What attracted you to invest in Automile?

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JASON LEMKIN

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.

but

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.

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Published on March 23, 2017
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