Stay disciplined

We cam across two companies that we all loved last week.

One was growing like crazy and we felt that they were the clear winners in their customer target niche which was very large. The team was impressive and we felt that this was a good time to get in before they start taking off.

Another one was a competitor to a public company and was a clear disruptor that we felt would overtake that public company in the next couple of years. They were also growing very well and had a much better product.

In both cases, we decided to pass.

In the first instance, the risk was just too high for us at the moment. We felt that exploring in another year or two would be the better option as the company really begins to scale. There is risk in the scaling and for our financing product, we felt that risk was too high.

For the second company, the pricing just didn’t work out for both us and the shareholders. We felt great about the company, but sometimes dynamics like the 409A and valuation just makes it not a great deal. We decided to circle back in 1-2 years once they’ve grown a bit and have a clearer path to IPO.

As investors, we love doing deals. That’s what gets us going, but we also need to stay disciplined as stewards of our LPs money. It was frustrating, but the right move.