“It’s about finally seeing something profound and deep underneath the surface, when others are still only seeing the tip of the iceberg, and still making judgements.” - Ho Nam, Managing Director of Altos VC
I think Ho’s definition of value investing here is also the most important element of investing in early stage startups. It’s a simple definition, yet there are a lot of elements that go into understanding when you have identified something “profound” or meaningful from a founder.
At Boost VC Unearthing something profound presents itself in a few ways:
The founders ability to communicate
I think of meetings on a compounding nature. If I had a meeting with someone, they are going to have that same meeting with 100 people. Would those 100 people walk away impressed? Confused? Excited? A founders ability to take very complicated technology and break it into smaller pieces is like watching a magician explain their tricks.
We have an awesome relationship with the founder
In this case the relationship is profound or meaningful already. Generally that is trust that has been built over years. It is not something that is easy to copy or mimic. Trust is the foundation of a partnership.
A unique insight from the founders experience
Sometimes, not often, the founder is so experienced in their field that they are able to say - “The rest of the market believes X, but it’s wrong because of Y.” And when they have that market insight AND they understand how to establish the new product into the market, it’s generally an easy decision to invest.
BLIND ENERGY and BIG MARKET!!
Sometimes, all you need is energy. A founder with blind energy is a force for good on the world. Sometimes, founders just have it. They have confidence in themselves. They have some general abilities that could help them. But mostly they never stop moving. Identifying blind, natural, energy is the most refreshing thing in my job.
Because I’m on a role with quoting Ho Nam:
“Consistency of effort (the input) is under valued. Consistency of outcomes is over valued. People sacrifice way too much for low volatility. Just show up every day and put in the work. Expect results to be lumpy. Don’t try to smooth it out. It’s not the way the world works.”
Investors are sifting to find a unique profoundness, and in order to identify it, at Boost VC, we put weight on the attributes listed above. But Unique profoundness, in its very nature, is unique. If we dissect the characteristics above, the base layer would be “Commitment, Energy and Integrity.” In order to find something profound, those pieces are the building blocks.