"It may be hard to wrap a plan or even an application around a significant technology breakthrough or science experiment. But just because we cannot quantify an opportunity does not mean it is not a real or a large one. Big technical breakthroughs do not lend themselves to spreadsheet analysis or IRR
calculations, but we will often take the risk if it feels right. Even a technology with 90 percent probability of failure may be worth doing if there is a 10 percent chance of massive impact in a large, important market."

what we look for: main fund – what matters
what matters / what we care about in your plan

For our main fund, we assume that a reasonable portion of the risks and milestones associated with seed-type investments have been mitigated, though we understand there is still significant technology and execution risk. While our focus remains on the capabilities of the underlying technology, we want to understand what risks remain (and what you're doing to mitigate them), as well as your production / go-to-market approach. Markets, financials, and full teams become more important, though we still accept gaps in the complete picture and business plan. But clear identification of the key success variables and missing pieces is important.
problem overview
  • What is the problem you are trying to solve? What pain point are you alleviating for your customer, and why would they pick you? What are their alternatives and what is the status quo? Is the value proposition jaw-dropping (from a customer perspective), and do you have customer referrals to prove it? Try to define the company purpose in one clear sentence.
  • At this date, what is the status of the underlying technology? How much further does the technology/innovation need to scale to meet commercial standards? What is the margin of error if the technology is underperforming or exceeding the expected cost targets? What needs to be achieved to make your value proposition compelling?
  • What are you looking for from KV? Why have you sought out us specifically?
your team
  • Who are you, and why are you qualified to lead this opportunity? Are you the long-term CEO of your company? What skill sets do you bring, and what skills will your team need to add? What parts of your executive team still require filling out? What is the team's relationship / association with the thought leaders in the field?
  • What is the company gene pool like? What are the gene pool gaps? For each gene pool gap area, who would be the ideal hire to solve the risk, and where will you find this person?
  • What are you looking for from KV? Why have you sought out us specifically?
milestones / financials
  • Please include your financial projections / P&L / balance sheet / cap table. Accuracy is more important than precision. Contingency planning on the financials is even more critical. What happens to your financial needs if technology or market development slips or costs are too high?
  • What are the milestones that this financing will achieve? How far are you from being cash-flow positive (in both time and money)? How many future rounds of financing do you project? What would make your company run out of cash, and what does the worst-case cash flow look like? For revenue-generating companies,what is your sensitivity to lower-than-expected revenue? Has your revenue ramp been tested? We like to see quarterly financials for the next eight quarters and annual financials beyond that.
market / competition
  • We don't like sizing the market based on analyst reports, because models cannot accurately predict disruptions. (And often a market covered by an analyst is too late for venture.) Instead, we prefer a bottom-up sizing of the market based on reasonable assumptions. On sizing the market, don't confuse addressable market with industry size. Your market size should be the maximum revenue for your business, not the entire supply chain. Is your business addressing a need in a large enough market ($1B plus)? Or if, as is often the case, you are addressing a subset of the market, what is its size and why will you be competitive in that segment? What opens up that segment to you? We appreciate detailed understanding of the nuances of the market.
  • Do you have a good understanding of the competitive landscape? Are you comparing your company against the competition in areas that matter to the end customer? Who are 10 ideal customers who will make your company successful, and what are you doing to obtain them? What are the threats that could make the market opportunity obsolete? How does your solution fit into the existing ecosystem / standards / incentives?
  • What customers/users do you have? How have you retained them? How will you increase their number exponentially—and continue to retain them?
  • What is your go-to-market strategy? Have you identified the right partnerships? Does your price point justify the cost of sale? Why will consumers use your product over its competitors? What keeps you awake at night? Do you understand your risks? Are they clearly defined, and do you address them in your marketing or technology strategy? The quality of your market risk assessment helps us judge how well you understand your market.