Sydney breaks down how she evaluates early-stage marketplaces across three pillars: founder fit and network, product potential, and traction metrics like retention and growth. She emphasizes there are no fixed benchmarks, only signals that match your investment thesis.
Chapters
kind of like zoom in, I would say, like on the pre-seed and kind of seed stage, if you're, you know, if you're having conversations with, you know, marketplace founders at that stage, and we can even kind of go into, I would say, like consumer and even kind of focus on commerce, you know, are there kind of specific, you know, metrics or benchmarks that you're kind of looking for at that stage? Or—
There really aren't specific metrics or benchmarks. The way I think about early stage investing is there's There's bets on the person, which is why are you the best person to build this business? Is there something about your background, your understanding of the space, your network and ability to build a team, or your, you know, technological skill set that makes you the best person to invest in? So that's, that's one reason we might invest. Another reason we might invest is around the product. Is this just a, you know, a blow-you-out-of-the-water product, like more impressive than what we've ever seen, really just kind of market-creating type of company? That's another reason we might invest at the early stages. And then the third reason we might invest would be traction. So this is what you're talking about with metrics. And for that, You know, growth is something important we look at, but we also look at things like engagement. If it's a consumer company, how much time? What does the retention look like? Is this a sustainable product where if you put more money into marketing, it will grow? Or, you know, for an enterprise company, for example, what about net dollar retention? Is this the kind of company where maybe it takes a little while to sell in, but once you sell in, you land and expand and you really grow with that customer? To service all of their needs. So there's no playbook for like, this is what a seed bet looks like. This is what a pre-seed company looks like. I think as founders, you all need to think about what is the investment thesis here? What is the rationale for investing in me versus waiting for the next company or betting on the competitor or not investing in this space at all? Because it's not just about the space, it's not just about the traction, it's about a few different things.
