What we look for in portfolio company founders
This blog post has been developed to help prospective applicants gain a better understanding of what type of companies and founders are a good fit for Skalata Ventures.
Hopefully this post will give you greater clarity around whether or not we’re a good partner to help you build your company.
We’ve separated this blog post into two parts:
· Companies that are a good fit
· Founders / founding teams that are a good fit
Companies
When selecting companies that will be a good fit for Skalata, there are two things we take into consideration: our investment mandate and our commitment to ESG.
1. Our investment mandate
In a nutshell, we only invest in companies that are:
· Innovative
· Capital lean / capital efficient; and
· Market ready
We believe that companies that meet these criteria are best placed to benefit from our program, will help transform Australia to a knowledge economy and have the best chance to become significant and sustainable businesses.
To read more about our investment mandate, check out this blog post.
2. Principles of Responsible Investment
Skalata Ventures abides by the Principles of Responsible Investment. This means that we incorporate environmental, social and governance factors into our investment decisions.
We will not invest in industries that we believe bring about a negative social impact such as gambling or weapons.
Founders
Alongside the criteria for a company to be a good fit for Skalata Ventures, we also want to make sure that the founders we select will get the most out of the program. The most helpful place to start is with our values.
We believe that:
- Intelligence combined with self-awareness and curiosity create a powerful learning mechanism.
- Great accomplishments come from deliberate intent.
- Dissatisfaction, conviction and resilience enable step change.
- Humility and generosity build enduring relationships.
- Respect, transparency and integrity are the foundation of significant and sustainable businesses.
Naturally, we want to work with people who share our values.
In addition to sharing our values, we’ve also noticed some specific traits of the people that benefit the most from our program.
1. They come for the program and the networks, not the money.
The most valuable thing we have to offer is the know-how and networks that we share with you over the course of the program and afterwards. Money can be raised from many sources but our program and the doors we can open are not easily accessible.
2. They engage with the program.
Over the last year, we noticed a direct correlation between the financial performance of companies and the willingness of the founders in those companies to engage in the program. By actively participating in the program, being prepared for their weekly and monthly meetings and critically analysing their business, they were able to get the most out of the program.
3. They have a vision, self-awareness and a desire to improve.
Founders know their businesses best and we respect that. We’ve found that the best founders have a vision, are incredibly self-aware and are able to admit when things aren’t going as well as they could be. Their open mindedness to try new things to solve problems is a trait that leads to greater outcomes.
4. They wish to build a significant and sustainable business.
For our program, there is a very important distinction between founders that want to build a significant and sustainable business and those that want to build a lifestyle business. We don’t invest in founders that are looking to build a “lifestyle business”. Additionally, we’re not about growth at all costs — we want founders in our program to build companies that will have a positive long term impact (i.e. job creation, tax generation, improving their industries) and that conduct business the right way.
Building a significant and sustainable business is not easy and it requires maturity and honesty. We want to help you achieve your goals and to do this we will hold a mirror to your business. Every business has its flaws and we’ll be far better positioned to help you address these flaws if you’re open and honest about them. If you can develop a system of honest appraisal, identification and resolution of flaws you are making a fantastic stride towards being successful.
We hope the above gives you greater clarity around what kinds of companies are well suited to our program and the traits of the founders that are most likely to benefit from it.
Next steps
If you’d like to read more about our program, check out the below blog posts:
1. SV seed investment program and entry deal ($100k + program)
2. SV follow-on funding available ($150k); and
3. SV selection process.
How do I apply?
Application for the first intake of our program in 2020 are open until 23 February. You can apply here.
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