I want to articulate the way I think about investment opportunities. I think it’s something that is poorly explained from the position of an early stage investor, so I’m going to do my best to define my mental model.

To begin, Venture capital is the asset class of human endeavor. Or it used to be, and Boost VC is bringing that back along with the other Deep Tech investors.

Human Endeavor is the energy that powers the world forward. Human endeavor is what creates social and technical change in order to make humans live better/longer. The Venture market now calls this Deep Tech… and we are thankful for the term.

When making investment decisions at the earliest stages of startups — I’ve learned there are two types of decisions: No Brainers, and Big Thinkers.

No Brainer decisions are when you talk to someone for the first time, and it doesn’t matter if they are selling hot dogs, hand grenades, or software, you identify a specialness about them that is undervalued by the market. That specialness is magic. When you see magic, you invest. When you run into these founders, you say yes as fast as possible and spend as little time on rationalizing it as possible —— Nothing kills deals like more time and more data.

The second type of decision is Big Thinkers. Big Thinker decisions are where we spend the most time, and we should.

Is this important?
Can this team execute?
Does it fit our business model?

These 3 filters will be defined differently by every investor. I think “Important” is largely over-looked as a filter. We need founders attempting ambitious world change in order to make it happen.

I think the focus of VC is super easy. The market of other VCs choose a popular concept to focus on and invest in… The best opportunities are somewhere else. The “Current thing” of today is AI. It’s incredibly important, but it’s also saturated with “Tourist Founders”, and Venture Capital becomes less valuable and too competitive in those situations.

I’m competitive, but hate competition when it comes to deals, so I look elsewhere.

An investment could be a good investment and not be important.
Or it could be important and not be a good investment based on the firms business model. (Many funds are learning this one the hard way from 2021-22 investments)

Venture requires a certain level of discipline in good times and bad.

My math has always been “If this becomes a $1B company, does this impact or return my fund.” Super basic, but at the end of the day that’s what matters for endurance in Venture Capital. Return your partners capital again and again.

This was fun to write out. Ill probably keep this as a living document to update and send to my team when people ask these questions of me.

*Originally published on Adam’s Substack - https://www.adamdraper.vc/

No Brainers and Big Thinkers.