A couple of weeks back Bessemer Venture partners (BVP) published their old investment Memos, this gave a rare peek into how VCs think when they are investing in future of technology.

BVP has made some serious returns from companies like Shopify, Twilio who are now public or other technology giants like Linkedin which got acquired

In my past post we discussed how traditional metrics can’t be used to invest in high growth loss making technology start ups.

In this post lets look at some patterns to look for when investing in such companies. All items are in italics below are directly from various Memos

 

1. The bet is on founder/s

One pattern that consistently emerges is that Bessemer’s best investment decisions centered on people. In retrospect, the early products themselves are barely recognizable today. Rather, passionate, analytical and relentless founders zigged and zagged their way to that elusive “product-market fit”, and these memos provide a glimpse of those winning entrepreneurs before they were famous.

Find intelligent, enterprising and ethical founders and once you find them stick to them

 

2. Growth is easiest and early sign

However unlike traditional models of looking at growth in cash, revenues. Look … Read the rest