Our primary focus is helping early stage companies deploy lightweight disruptive business models to become the low cost player in their respective market. We bring traditional financial institution best practices to the angel investing space.
We provide acceleration services, not just advice.
We provide hands-on support through our in-house operating team, plus a proprietary network of outside executives who work with portfolio companies on an as-needed basis. This is common in growth equity investing, but much less common in early-stage investing. Our partners are experienced operators; we have founded a range of businesses both as stand-alone startups and on the Goldman Sachs platform. We've invested extensive time and effort in identifying best practices for many of the disciplines necessary to grow a startup; see some of our conference presentations for examples.
We reserve capital to make follow-on investments in our companies as they grow.
Most angel investors do not have the financial resources to provide support to their companies as they grow. As an institution, we do. We were amongst the first outside investors in Cornerstone OnDemand in 2002, and we then invested in all 8 subsequent rounds until it went public in March 2011.
We avoid investing in competitive businesses.
Our goal is to make each of our portfolio companies a winner. If one is struggling — and it’s inevitable that some will — we continue to devote significant time and attention to helping the company. We can’t do that with a whole heart if one company is directly competitive with another.
We are generalists.
The conventional view is that you add more value by specializing: investing in just one theme. We fundamentally disagree. Our view is that by being generalists we can offer best practice from one company to another, have companies that can positively help other portfolio companies, and have a better chance of seeing the wood for the trees. Our perspective would differ if we were a late-stage investor, but we find that early-stage companies face many similar challenges regardless of their industry and business model. In addition, we think that saying we are specialists in "Industry X" is dangerously limiting. Our mission is to invest in sectors that will boom 3 years from now, and we need to listen constantly to entrepreneurs meeting with us to identify those new sectors.
We invest through our fund or not at all.
We prohibit all personal investing by our partners and employees in early-stage companies. This maximizes returns for our investors, and avoids signaling problems and potential conflicts in our portfolio companies. Surprisingly, many traditional VC funds permit this behavior.
We are investors alongside both you and our limited partners.
Our general partners have personally invested more than 10% of our assets under management, which is a far higher percentage than most venture capitalists have invested. We care deeply about our portfolio companies' success because it's our own money in them, not just "other peoples' money."
We are willing to say no to entrepreneurs (along with feedback).
Entrepreneurs are used to VCs saying, “I would invest but my partners didn't like your business.” “We'll invest as soon as you identify a lead.” “We'll invest once you show a little more traction.” These are almost always euphemisms for “no,” so that the VC has the flexibility of saying “yes” if they change their mind. We don’t think you or we have time for these games. A straight “no” saves everyone time. We hope that some of the feedback we give you will help you evolve the company in a direction that will make it more attractive to other investors as well as ff.