I ONLY invest in teams and products that deliver a real social benefit to the end consumer. The customer has to emotionally care about the problem your product is solving; if you solve the problem well, it typically translates to viral growth and revenue momentum. It also helps to be in a large market and at the right time :)
My last exit was TubeMogul which had a 22x return. So if you had invested $5000 in 2009 you would get $110K this year.
Investing in Startups is like picking stocks but much harder. In the public market you get all the financial information and there is a lot of standard measures of success that allows public stock investors to pick companies based on their past quarterly performance.
In the startup world, there are no standard reports published by any of the teams. You have to spent a lot of time with the team to understand the market, the customer need, the core competency of the team, their work ethics, their analytical abilities, their execution abilities and so on.
That is why you need to follow an expert and their syndication. There are a handful of real operating guys who have started companies from scratch and they know how to identify markets, customers, teams and competitive forces.
By investing with a syndication you get all the benefits of the lead investor doing the hard work of picking the right teams for you. You get to invest in the deals that often end up in front of late stage Venture Capital firms at higher valuations 12-18 months out.
My past startups have raised over $500M of venture funding from the following top tier venture firms:
- Sequoia Capital
- Sutter Hill
- Norwest Venture Partners
- Storm Ventures
- TH Lee
- Trinity Ventures
- Foundation Capital
- Focus Ventures
- Scale Ventures
- Credit Suisse
- JK&B Capital
My past successful picks have been:
TubeMogul - IPO in 2014
CafePress - IPO in 2011
Intellisync - Bought by Nokia over $400 million