In this interview, investor Colin Gardiner explains how he evaluates early‑stage marketplace startups. He prioritises gross merchandise volume (GMV) growth over take‑rate percentages at the pre‑seed stage, but still expects a nascent take‑rate to signal that the business can monetize and therefore has product‑market fit. As a company matures (seed to Series A), the take‑rate should stabilise. Gardiner stresses the importance of understanding seasonality: marketplaces often have uneven monthly patterns, so sequential month‑to‑month growth is less meaningful than year‑over‑year growth for the same month. He advises founders to articulate their business model from first‑principles, clearly describing how the marketplace creates value, its seasonality, and growth trajectory, rather than deferring to vague explanations.
Chapters
More specifically, because founders are always asking, you know, okay, that sounds great. Like, you know, looking for like product market fit, but like how do I invest? Like, I guess you as an investor, you know, how do you evaluate that typically when it comes to the specific kind of metrics that you look for?
I think early stage, I really, I focus less on take rate and I focus more on GMV. I would say generally, like I generally get a little bit concerned if like you have no take rate, you're like, hey, I'm not gonna monetize. I just wanna get on the platform. I would be like, honestly, that, I don't think that's product market fit. Like if you have, if you can't charge people or like maybe you're gonna charge them for SaaS, I don't know. But I'm just saying like generally if you're not charging, it's not product market fit unless your product is free. But like most people's product is not free. So I would say having a take rate is important. How much it is at the early stage, less important to me. And by early stage, I mean like pre-seed, not like by seed stage, you should be pretty like developed in what the market is going to be for your take rate. Maybe even by Series A, like you probably should be fairly stationary. It's not moving all over the place. But I look at GMV, like just simple GMV growth. And the reason is, is that most of the time you're gonna be in a market taking and making mode. So realistically, you know, outside of seasonality, you should be like able to have some sequential growth. And then usually by year or 2, you know, you're gonna have a year over year. And that's what I started to look at is like, how are you changing year over year? Because most marketplaces have seasonality, they're not 24/7 like the same volume. And so I think that's one of the things most investors that aren't marketplace investors miss is they're like, why is your December, like, you know, if you're not in e-commerce, like let's say, you know, you're like outdoorsy, you're in a summer travel business, your December numbers are the lowest of the year, right? Whereas your June, July, and August are awesome, right? But you look over year over year, December to December, you could see the company's growth, right? And so I think that's a nuance here that I try to look for is like and understand from a first principles perspective is like, what's your seasonality? How does it work? And try to understand that because I don't expect you to have sequential growth, right? But it is nice to see early, like in the first year, like you should kind of be growing sequentially until you started to hit some of the seasonality impacts. So I think that's important, one, to understand, but two, also to explain to people like, what is your business? So I think a lot of people don't do a good job of explaining from a first principles, like how does my business work? I'm the expert. I'm gonna tell you how to think about it. I, people do not do that. They're kind of deferential. So.
