- Yale connection: An alumni as a founder, executive, Board member, and/or lead investor
- Demonstrated product / market fit
- Strong team
- Large market
- Clear differentiation and defensibility
- Attractive metrics relevant to particular industry and sector
- Top-tier lead investor
This is a high-risk, high-reward asset class, so diversification is wise. We invest in 15–25 deals over the course of 12–24 months, leaving ourselves up to four years for a few follow-on investments. That means that in two years, most of an investment will be divided over a portfolio of about 20 companies, placing a number of “small bets” on a diverse group of companies.
Deals / Due Diligence
We participate in a variety of deal stages and structures. Our early stage deals (about 30% of our portfolio) are often convertible notes with caps or SAFES. Later stage deals are typically priced rounds with an institutional investor lead. We evaluate deals that already have a lead investor and that are definitely getting done, and our Investment Committee advises on a final decision.
Our Investment Committee—consisting of smart, experienced investors—meets about 8-12 times a year. In these two-hour sessions, we look at two to three deals (typically selected from 20-30 investment opportunities). We make our due diligence reports and recordings of the IC meetings available to all investors.