Where you typically invest:
You come in for Series B/C and later rounds. You look for companies that are growing fast. They’re an established brand and consistently beating industry benchmarks in month-over-month revenue.
Common questions you should consider asking in due diligence:
At this point you’re going to need a team that can navigate a successful, profitable exit. What is your exit strategy and who on your team has the expertise in M&A, IPO, etc. to navigate this process?
You have strong unit economics in at least one market but you may not in all of your customer segments – where are you unit profitable, where are you not, and what’s your strategy to get to bottom line profitability?
Where you can add the most value to entrepreneurs at this stage:
At this point the company needs to have people on their team that can navigate an acquisition/IPO. Help them understand what type of talent they need based on their exit strategy.
At this point the team has likely already turned down one or more acquisition offers. Help them to navigate these to understand what’s a good deal for them and their investors.