I am considering starting doing some few small investments. Some of the investments will be monetary, others in time (by committing my time to advice and help hands-on new companies). So I thought I would define and write down what will be my investment philosophy (that might change over time). I’m aware that all investors are emotional on their investment decisions and I don’t expect to be the exception, but at least I want to have a framework for my evaluation. So here it goes:
- Market: I will invest in areas and industries that I know and understand (because of my previous experiences) and where I can actually help. This includes but is not restricted to: Information Technology, Travel, Mobile, Online Marketplace, e-commerce, Latin America, etc. I will keep learning about new industries and markets in order to expand my reach.
- Founders: I will invest in entrepreneurs that have “what it takes”. I think that technical skills and relevant experience are a necessary conditions. But I believe that “what it takes” is way more and it’s related to attitude, motivations and personality. (This is a whole topic worth a post on itself). I will try to evaluate whether the entrepreneurs are doing it for the right reasons, whether they count with the internal resources to overcome any obstacle, whether they have the energy to provoke change and the courage to do what it takes in the hard moments.
- Timing: I will invest in companies that are taking advantage of a timely phenomenon. I believe that timing is everything and that great value is created when paradigms are shifting or new technologies are emerging. Understanding the “why now” will be essential to me. I have two books that I love that refer to this: “Technological Revolutions and Financial Markets” by Carlota Perez and “The Innovator’s Dilemma” by Clayton Christensen.
- Impact: I will invest in companies that will have a positive impact in the world. I believe that innovation itself is already a net positive for society, but if additionally the business helps the planet and humanity in areas such as environment, human development, economic development, the better.
- General: Of course I will evaluate all the criteria that any investors evaluate: Market Size, Competitive Landscape, Product and Technology, Metrics and Milestones, etc.
If you are working on something amazing that fills these criteria let me know (dsaezgil @ gmail). I don’t plan to invest in too many companies, as I won’t have enough time to actually help. But even if I can’t invest I will try to help you with some tips or feedback. Best!