Why Top Investors Passed on Great Deals

Opening: Implementing the right service level is crucial for sharing economy startups to meet customer expectations and achieve profitability. Quote:

"The service model means for dockless sharing you have to have a 20-30x supply side so that the rider, the demand side can be addressed readily and easily... That's a very different kind of breaking even model."

Takeaway:

• Ensure ample supply to meet user demand promptly.
• Adjust business models to account for high service levels.
• Consider the impact of service levels on unit economics and profitability.

Opening: Understanding the economics behind capital-intensive models is crucial to avoid pitfalls in fundraising and business growth. Quote:

"You have to build a lot of capex upfront and hopefully the cash flow will trickle in... When you raise the most expensive capital in the world, which is venture capital, then build a return model based on capex infrastructure, that's already a disconnect."

Takeaway:

• Be cautious investing in models requiring heavy upfront capital.
• Align funding sources with the business model's capital needs.
• Ensure unit economics make sense before scaling operations.

Opening: Trusting your own instincts can be more valuable than following conventional wisdom or established rules when assessing startups. Quote:

"I learned to trust my instincts and not to try all the BS rules of thumb you hear from older VCs... The great companies redefine the KPIs."

Takeaway:

• Trust your gut feelings about a startup's potential.
• Recognize that great companies may not fit existing KPIs.
• Evaluate businesses from first principles rather than standard metrics.

Opening: Focusing too narrowly on specific investment criteria can cause founders and investors to miss out on great opportunities that don't fit their predetermined mold. Quote:

"We just said, hey, we don't do this anymore. We don't do anything different outside of our strike zone... And as a result, it's like a $3 billion company now."

Takeaway:

• Overemphasis on narrow focus can blind you to promising ventures.
• Leverage your industry knowledge to identify winners, even if they fall outside your focus.
• Balance specialization with flexibility to seize great opportunities.