Benson Oak Ventures Investment Strategy: Four Questions Approach

The Benson Oak Ventures investment approach combines focused investment decision-making processes and principles with a post-investment approach predicated on adding value on the operational and strategic side.

Benson Oak Ventures invests with the goal to support big ideas led by visionary and execution-focused entrepreneurs aiming to build transformative companies, through multi-stage, high-conviction model of investment, leading both initial and later rounds.

Our investment focus on B2M² companies leverages Consumer and SMB offerings which share common themes around mass market brand-building & go to market strategies as well as the importance of awesome UI and UX to complement technological breakthroughs.

SMB Tech investments concentrate on those products and services commonly utilized by large companies and now accessible for SMBs. SMB-focused companies such as Shopify, GoDaddy and Wix as well as recently public traded companies such as Zoom, Dropbox and DocuSign use technology to provide core operational features that help SMBs to operate, grow and scale their businesses. SMB-focused products within the Benson Oak portfolio includes video marketing tools from PROMO and financing optimization made available by BECOME.

Platform businesses combine B2B & SMB revenue models with own community that enhance the business model. They thus create new industries and marketplaces with a virtuous circle of sticky product offering with loyal user base, leveraging similar go-to-market and brand-building methods as classic B2C.

For B2C and Platform investments, our focus revolves around EdTech, Sports & Lifestyle and Fintech & Crypto, whether using B2C and B2B2C channels. These fields as areas particularly ripe for disruption, with a common theme -

creative solutions leveraging new delivery forms and devices, combining technical prowess and great user experience with innovative business models, thereby creating brand and communities.

Our portfolio includes Zengo, the first keyless crypto mobile wallet and NY-based Harri, a platform which combines a SAAS offer for hospitality with community of candidates to create a new industry around Talent as a Service, along with two new companies to be announced.

The 4 Questions behind every investment decision

Photo by pine watt on Unsplash

We look at potential investment, through the prism of overarching 4 questions:

1. IS IT A B2M² COMPANY? Does the solution disrupt and/or enable efficiencies in an enormous target market? The focus of this question is on assessing whether there is a large market opportunity addressable through mass market scale, and disruption can be through technology or business model. A potential B2M² company is addressing immense & global problems with creative technology and/or solutions, aiming to build companies around audacious missions. We believe this is the basis for creating big businesses — the idea and the potential market itself must be transformational in scope.
2. HOW WILL YOU WIN? Can the team scale the brand and build a long-term advantage, user base and scale to millions? There are enormous risks inherent in creating truly disruptive markets — therefore, we must believe we are investing with a team that can build a long-term advantage by building a brand and user base and scaling it to millions. “Founder Market Fit” is required for competitive advantage, network and complementary experience and know-how, beyond just “identifying a problem”. A separate post will follow discussing founder market fit in context of our new deals.
3. WILL WE ADD VALUE? We seek to lead investments and work with entrepreneurs to form value-added investment consortiums. Adding value post-investment is part and parcel of the conviction model and can take on different forms, and in the case of most deals, we seek co-investors who can complement key gaps in our own experience, network and knowledge. We have led the rounds in 6 of 7 portfolio companies including a follow-on top-round.
4. IS THE BUSINESS MODEL SCALABLE AND SELF-SUFFICIENT. Is the business model scalable and self-sufficient? Does it leverage network effects to scale? We do not want our companies to be dependent on external financing forever and view a sustainable business model as the foundation for winning position and maximizing options. Moreover, we strongly believe in the power or community to sustain brands and engender better business models.

Photo by Keith Johnston on Unsplash

For those entrepreneurs pitching us, please be prepared to address these points in your materials and investor presentation and suggest you pay particular attention to the concept of Founder Market Fit in your internal planning and hiring and external pitching.

We are very excited about the transformative nature of our portfolio which will soon number seven companies, as we will be announcing soon three new lead B2C and Platform investments — one in EdTech and two in Sports and Entertainment. For each, we will be detailing in upcoming blog posts the rationale underlying our investment decisions using this 4 Question Methodology.