In the middle of COVID-19, in the end of 2020 on Dec 30th I got a call from my partner from Bay Area, who was describing excellent opportunity to invest in growing fintech platform for trading. My first question was what was the multiple P/S price to sales? - The answer was 3x. In Fintech world during inflated crazy valuations (10-15x or even 20x time revenue), we got offer on secondary of 3 times sales? I was 99% sure, that we need to catch this opportunity on the secondary market. What is the timing for a deal? - 4 weeks was the answer. So the next month we spend on the phone with our LPs convincing them to accept capital call earlier and catch this deal ASAP. Finally we made a deal in 4 weeks. 3 reasons for that were: - 1. Profitable growing company in hot market. - 2. Discounted valuation comparing to competitors - 3. Direct access to information and seller, who had a need to sell shares quick. Just in 6 month after the deal we have received and offer to sell our position with 3X ROI. That was another indicator, that we have made good decision and were moving fast to invest at discounted valuation.
In a scenario where I had to make a quick investment decision, I came across a healthcare technology company that had developed a telemedicine platform. Critical information for the choice included the adoption rate of telemedicine services, reimbursement policies, the company's partnerships with healthcare providers, and the scalability of their platform. For example, the company had successfully onboarded several large hospitals as clients, showcasing their credibility and potential for growth. In addition, their focus on user experience, seamless integration with existing healthcare systems, and strong privacy and security measures stood out. The ability to tap into the growing demand for convenient and accessible healthcare services drove my decision to invest quickly in their venture.
In a scenario where a startup receives an acquisition offer, venture capitalists must consider market potential, team expertise, and the details of the offer. Market potential helps determine growth prospects, competitive landscape, unique value proposition, and evaluate the startup's position. Team expertise assesses founders' qualifications, experience, and track record. Financial analysis helps understand revenue projections. Acquisition offer details indicate potential impact on valuation and growth prospects. By considering these critical factors, venture capitalists make quick investment decisions.
In a scenario where a quick investment decision is required, investing in a food delivery startup with an autonomous delivery robot can be a unique opportunity. Critical information includes the robot's performance metrics, cost-effectiveness compared to human delivery, regulatory compliance, market demand for autonomous delivery solutions, scalability potential, competitive landscape, and the team's expertise in robotics and logistics. For example, if the robot demonstrates higher efficiency, reduced delivery times, and cost savings compared to traditional methods, it could gain a competitive edge in the food delivery market. The regulatory landscape regarding autonomous robots and the startup's ability to meet these requirements is also crucial. Evaluating market demand, potential partnerships with restaurant chains, and other competitive factors will help make a well-rounded investment decision.