Blackbird's wall of investments.

Looking Forward: 2017

Date Published:
February 22, 2017

What we are looking for in founders and companies in 2017.

This post is for founders looking for investment from Blackbird.

We want Blackbird’s process to be simple and transparent so that we can get to know Australia’s most ambitious founders at the earliest stage.

Since 2012, we’ve invested in 35 companies.

We have learned a lot. Here is where we stand today.

No cheque is too small. For founders we love, we’ll happily invest the first $25,000 to help get you going.

Australian exceptionalism. We only invest in teams with an Australian connection. We think we have an advantage in pattern matching the best Australian founders. We think those teams have a unique set of attributes that don’t fit perfectly the standard Silicon Valley founder mould.

We want to talk to you. We want to meet you. The CEO. The founder with the potential to be the best in the world. We don’t want to meet your banker, your advisor, your chairman, or any other unnecessary layer that prevents us from getting to know you.

The hungry, not the proven. We have an extraordinarily high tolerance for roughness. No founder is too raw. No team is too fragile. We do not expect to see polish. We will willingly look past glaring flaws. All our best founders had obvious weaknesses that we overlooked because their sliver of genius glowed so bright.

Hell Yes! Or No. We operate with high conviction. You won’t see us going from lukewarm to suddenly chasing you when your deal gets competitive. We don’t make decisions based on what other investors do. We fall in love, and then we make our move.

“To one who has faith, no explanation is necessary. To one without faith, no explanation is possible.”

Thomas Aquinas

Engineers, everywhere. We won’t back founders who have an agency as a co-founder. Employees care 10x less than founders. And agencies care 10x less than employees. We want to invest in companies where the majority of our money is going towards building the best technical teams possible.

Global from day one. We have a bias for businesses that access global markets from day one. We have a bias against businesses that are focussed only on Australia, or that plan to grow country by country, starting here.

No US copycats. Pitching us a Postmates/Munchery/Groupon/ for Australia isn’t likely to work.

No university spinouts. No Perth stockbrokers. We shudder at the thought of ‘patented’ tech being handed off to an ‘experienced team’ looking to commercialise through a backdoor listing via a Perth stockbroker shilling a reverse takeover of a failed mining company.

No ‘Exit Strategy’ slides in your deck. We think in decades not days. We have a ‘no exits sign’ in the meeting area of our office. We are in this for the long haul. Truly great companies don’t get built with an ‘exit strategy’ in mind.

No A-Holes. Life’s too short. When we invest, we’re envisioning a 10+ year relationship with you. A-Holes might make you money but they’ll also make you miserable.

No gambling, no guns, no alcohol, no tobacco. None. Never.

Red-blooded business models. We want to make our kids proud. But great businesses are powered by powerful business models and we don’t shy away of the need for our companies to optimise for that.

The relentless drumbeat of progress. We look for teams that can achieve a measurable unit of progress within 12–18 months and who are talking deeply with their customers before they meet us. You don’t need to be the world expert in your field. But you do need to be the world expert on your customers.

Selling in 60 days. If your sales cycle is longer than 60 days, we get nervous. We picture you having expensive meals with the CIOs of big companies and burning 18 months sleepily trawling conferences and hotel rooms in the hope of closing that One Big Deal. If your customers can pull out their credit card and get started straight away, we’re much more likely to get excited.

Agnostic to trends and themes. We don’t search for themes to invest in. We look for the fundamentals: great people solving big problems with rapidly iterating products and short sales cycles and then we dive in. Whether it’s software or satellites, those elements matter more than the hype cycle.

High valuation founders. Founders seeking high valuations correlate with founders that go on to succeed. This is counter-intuitive in a sense, and makes us sound like we are arguing against ourselves. But we aim to pay fair prices to invest in wonderful businesses, and we expect our high conviction to be exceeded by the teams we back.

We pay it forward. We expect our founders to have a ‘pay-it-forward’ mentality. We want them ask each other for help, and we expect they’ll stretch to help where they can. This is a virtuous cycle that intensifies as our community expands and it is one of the best things about being with Blackbird.

We love high responsibility businesses. We love businesses who want to own as much of the customer experience as possible. That’s why we’ve been historically reluctant to invest in ad-tech, e-commerce, and SEO-driven platforms where just a sliver of the customer experience can be controlled by the founders.

Big markets. We ask ourselves with every investment — could the successful version of this company return our entire fund? The further we go along, the more we realise this is the key to venture returns.

Passionate, repeat customers. At the early stage, breadth isn’t nearly as impressive as depth. We look for obsessive customer support, proximity to the pain, and a fanaticism for delivering a great experience.

As the founders go, so do we. We will aim to hold our position in your company for as long as possible.

For the exceptional founders, we will make exceptions. Of course, we will constantly test our beliefs. We will always be looking for the right moment to break a rule.

Already, we’ve seen that greatness lies in the exceptions.

If you are a team that believes as we do, email us.

We can’t wait to meet you.