Investment Criteria
Nodal Partners is interested in helping "Candidate Companies" run by people known to at least one of our Members. We do not accept business plans from people we don't know.
Here are the criteria we care about ... beyond the obvious elements of a good investment, namely: high integrity, solid management skills, good market, competitive advantage, etc.
- Nodal Companies With Evidence Of Product-Market Fit. We like network-service-based companies with some evidence of product-market fit. That is, we need to see a product that is working, with evidence of customers needing it and willing to pay for it. The product can be early or "beta," and customer confirmation can be thin, but we don't make investments that are purely developmental.
- Modest Capital Requirements. Many Candidate Companies only need modest amounts of capital to get to profitability or at least to survival. The Nodal Partners model anticipates small-to-medium six figure investment, although we can and will syndicate with other investors to go higher if necessary.
- Companies Using Our Business Development or Corporate Development Services. We particularly like when Candidate Companies are positioned so that our business development or corporate development services can add significant value. The best sort of deal occurs when we help you land a deal that gets you to profitability much quicker than originally planned. But we also like to help with distribution, strategic partnerships and M&A.
- Good Governance. The owners of Candidate Companies will be left firmly in control, but we like situations where we can have some influence and some protection. Although "seed" stage in not the appropriate time to install complex controls, the reality is that if the company is successful, little or no added capital may be needed and our "round" of investment needs to have protections if the company does not develop and exit as expected.
- Rapid Exit. Most network-service-based companies are best positioned to join with other such companies as these newly disruptive industries morph and consolidate. We leave the billion-dollar, "next big thing" investments to the VCs; we focus on developing a small but attractive company with a great solution, talented team, enthusiastic customers and competitive advantage ... and then putting that in front of the industry players who are consolidating the market. There is nothing wrong with building a great company over 5 years, but we are more comfortable doing the early development and selling before Series B is required.
If you think your company can benefit from our involvement, please sent us the following information, and we'll be in touch. If you have any questions, you can use contact us to pose them.
