7 Percent | help not hinderance with early stage tech investing

We are not interested in startups which iterate a market, we are interested in startups that transform them. Change is the prerequisite of disruption. To monopolize a market, we believe you must fundamentally disrupt it.

To do that you must have a product which solves a painful problem in a much better way than existing solutions or serves a need which to date is not being currently satisfied.

What type of startups do we invest in?

We are sector agnostic, although we don’t invest in areas we either do not understand or where we cannot add value. A good indicator is what we have invested in to date and our experience.

Going forward we are interested in enterprise and consumer SaaS (especially sectors ripe for transformation – e.g. banking, farming, movie making) as well as internet of things and mobile applications.

We will not invest in any business –however good it might be — which is not a billion dollar opportunity. By that we mean:

  1. Your startup must be doing something which is scalable enough in a large enough market for a future valuation of $1bn to be possible
  2. You should have a story which explains why you believe 1) is true
  3. You must have the ambition and drive to want to build such a business

What stage of startups?

  • Early/Seed (concept/lean testing phase, BETA users/customers, no revenue)
  • Pre-Revenue/Angel (early traction and growth trajectory with users, may have some revenue)
  • Growth/Angel or Series A (sustained record of growth among users, revenue and markets, looking to expand/scale)

What sort of growth rate is good growth?

Early stage companies should aim for between 5 and 10% week on week growth of your core metric; ideally revenue, but if not revenue it could be user signups for example, if user signups represent the future value in the business from which revenue will be generated. 5 to 10% week on week is not sustainable forever, but should be achievable early on (e.g. your first couple of million in revenue or your first million users).

Paul Graham (Founder of Y-Combinator) wrote an excellent blog on startup growth we recommend you read.

What is our typical investment size?

We typically invest between 75k USD (50k GBP) and 300k USD (200k GBP). This can be on our own but is more often alongside other angel investors or an early stage founder-friendly VCs.