Quora Answer: As an Investor, Which Growth Metrics Do You Look at When Deciding Whether Invest?

The following is my answer to a Quora question: “As an investor, which growth metrics do you look at most closely when deciding whether or not to invest?” 

Anybody, with the right advise and mentorship, can put together a compelling business case for investing in the company.  Those numbers are important, such as the serviceable accessible market, the projected market share, and the quantified risk exposure.  We also look at whether this addresses a grey market, and the potential for scale.  An early stage investor also needs to consider the capitalisation table across up to three or four rounds of funding before exit.  Depending on the industry, we are looking from 3x to up to 100x. 

However, all those number assume the team can actually deliver.  That is the first thing any good investment committee considers.  There is no point looking at the growth metrics without considering the people behind the idea, the founders and the team.  We are not investing in a product or service.  The product or service is the outcome.  What we are actually investing in is the people.  A good team is resilient, has a spread of expertise, some industry experience, and management skills.  If there is some minor inadequacy, often borne out of inexperience, that is why we have mentors and advisors.  But some teams are obviously dysfunctional.  In such cases, no matter how good the idea behind the startup, we decline.  Should the business fail, of the idea is good enough, we can always come back later and buy them out.