I fed every deal I’ve ever done to an AI — 38 bets, 400+ pages of deal memos. Here’s what my best investments have in common…

So far, two companies out of my 38 investments have broken out: Micro1 and Rilla. What made these bets so much more successful than others?

This morning, I used NotebookLM to analyze my investment memos describing every deal I’ve ever done. Here’s why the great deals beat the rest.

Massive TAM — My most successful investments addressed huge markets. Take Rilla…Rilla’s sales coaching is valuable for anyone doing outside sales. That’s millions of people.

If you want to build a big company, you need a lot of potential customers. In some of my less successful investments, the TAM was much smaller.

Product Velocity — Successful startups throw a lot of things at the wall and see what sticks. When I invested in Micro1 in 2023, they weren’t doing AI data. They were finding engineers for startups.

But their AI interviewer happened to do an amazing job of finding experts to create data for AI models. Micro1 pivoted to that and has passed $100 million ARR.

When I invested, Micro1’s product velocity was clear. They had popped up a new AI interviewer in no time at all. 

Most startups can’t match that pace. 

Among my investments that didn’t break out, product velocity was minimal. When competitors released a great new product, they were unable to respond. 

Strong Financials — We’re used to startups burning a lot of money. But my most successful investments had little to no burn when I placed the bet.

Compare that to a startup of mine that failed recently. They actually had a small amount of debt when I invested, which should’ve been a red flag. 

At the time, I didn’t have the experience to flag that issue. That’s part of the process of investing. Every success and failure teaches you a lesson.

Wrap-Up

NotebookLM did a great job of surfacing the key things my best investments have in common.

This tool is incredibly powerful. It looked at dozens of deal memos and drew conclusions in less than a minute.

In the future, I’m going to back companies in giant markets with strong financials and serious product velocity. If I’m lucky, I’ll nail more companies like Micro1 and Rilla. 

What do your best investments have in common? 

More on tech: 

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