Ex-founder, product manager, and growth strategist turned VC. I invest based on market need, team strength, unit economics, product validation, defensibility, and agile product journeys. Seeking impactful startups with clear potential in familiar domains.
In the dynamic world of startups and venture capital, experience is the most valuable currency. It's the lens through which we view potential, the compass that guides our decisions, and the foundation upon which we build our investment strategies. As someone who has journeyed through the trenches of founding a company, leading product management, and strategizing growth, I've garnered a wealth of insights that now shape my role as an investor.
The Founder's Perspective
A decade ago, I embarked on one of the most challenging yet rewarding journeys of my life: founding a startup. This experience was my first deep dive into the world of business, where I learned the intricacies of building a company from the ground up. From ideation to execution, from hiring the right team to navigating the unpredictable waters of the market, every step was a lesson in resilience, innovation, and adaptability.
The Product Management Hat
Following my stint as a founder, I transitioned into product management. Here, I was introduced to the art and science of creating products that not only meet market needs but also drive business growth. Balancing user requirements with business objectives, prioritizing features, and ensuring seamless collaboration between teams were all part of the daily grind. This role honed my ability to view businesses from a holistic perspective, understanding the symbiotic relationship between product development and market success.
Growth Strategy: The Catalyst
As a growth strategist, I delved into the nuances of scaling businesses. This role was all about identifying opportunities, optimizing processes, and ensuring that businesses were not just growing, but thriving. It was here that I truly understood the importance of agility, foresight, and data-driven decision-making in the fast-paced world of startups.
Merging Experiences: The Venture Capitalist
Today, as a Venture Capital investor, I bring all these experiences to the table. My investment thesis is not just based on market trends or financial projections, but on a deep-rooted understanding of what it takes to build, manage, and scale successful businesses. The areas I cover in my investments are not chosen at random; they represent spaces where I have clear domain experience and can offer more than just capital. I offer insights, mentorship, and a partnership grounded in firsthand knowledge.
To the founders and entrepreneurs I work with, I am not just an investor. I am a fellow traveler who has been on a similar journey, faced similar challenges, and celebrated similar victories. My commitment goes beyond financial support; it's about sharing the wisdom of my experiences, offering guidance when the path gets murky, and celebrating every milestone, big or small.
Learn about my Venture Building Framework
Pablo Cruz
In conclusion, the world of venture capital is as much about people as it is about numbers. It's about understanding dreams, recognizing potential, and fostering growth. With a decade of diverse experiences behind me, I am excited to partner with the next generation of innovators, disruptors, and changemakers. Together, we will shape the future of industries, one investment at a time.
My Portfolio Thesis
I have a bias toward early-stage (pre-seed, seed, and Series A) opportunities in the following spaces:
- Fintech (includes real estate and insuretech): increasing digital adoption, regulatory advancements fostering innovation, demand for convenient and inclusive financial services, and technological advancements such as AI, blockchain, and open banking, driving disruption and growth in the industry
- Climatech/Energy: urgency to address climate change, growing demand for clean energy solutions, supportive policy frameworks promoting renewable energy, technological advancements in energy storage and efficiency, and increasing investor interest in sustainable and impactful ventures
- Transportation/Mobility (includes logistics): rise of e-commerce, demand for faster and more efficient delivery services, advancements in autonomous vehicles and drone technology, emphasis on sustainability and last-mile solutions, and the need to optimize supply chain operations amidst changing consumer behaviors
- Healthtech: rising healthcare costs, increasing demand for remote and personalized care, advancements in AI and data analytics, regulatory support for digital health solutions, and the need for improved patient outcomes and access to healthcare services, driving innovation and investment in the sector
My Investment Criteria
In the world of venture capital, the ability to discern the potential of a start-up is both an art and a science. It's a delicate balance of understanding market dynamics, assessing the strength of the founding team, and diving deep into the financials. Here's a closer look at how I evaluate the start-ups I consider for investment:
1. Unmet Need and Market Size
The first and foremost criterion is identifying a genuine unmet need in the market. A start-up that addresses a pressing problem or fills a significant gap has a higher chance of success. But it's not just about the need; it's also about the size of the opportunity. I delve into the Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM).
Ideally, I'm aiming for opportunities in markets that are upwards of $1B with a fast-growing sector Compound Annual Growth Rate (CAGR).
Pablo Cruz
2. The Founding Team
Behind every successful start-up is a passionate and competent founding team. I always ask: Is this the team to solve the identified unmet need?
I look for founders with a clear vision, domain expertise, and the tenacity to navigate the challenges of the start-up world.
3. Unit Economics
A start-up's unit economics provides a clear picture of its profitability and scalability. Two key metrics I pay close attention to are:
- CAC Double: How quickly can the start-up double its Customer Acquisition Cost (CAC) through revenue? This gives an indication of the efficiency of its growth.
- Retention Asymptotes: How does customer retention behave over time? A retention curve that plateaus at a high level indicates strong product-market fit and customer satisfaction.
Pablo Cruz
4. Validation Data
It's crucial for start-ups to demonstrate that they are "building the right product." I look for tangible validation data, be it through pilot programs, customer testimonials, or early traction metrics, to confirm that the product resonates with its target audience.
Pablo Cruz
5. Moats of Defensibility
In today's competitive landscape, defensibility is key. I evaluate what moats the start-up has or plans to build, be it through technology, network effects, brand, or unique partnerships. A strong moat ensures that the start-up can fend off competition and maintain its market position.
Pablo Cruz
6. Product Journey
Understanding the 'what' and 'how' of a start-up's product journey is essential. I assess:
- Ability to Test, Learn, and Iterate: Start-ups must be agile. I value teams that can quickly test hypotheses, gather feedback, learn from it, and make necessary pivots.
- Valuation: While the promise of a start-up is essential, the price of entry matters too. I look for a reasonable valuation based on the industry, stage, and comparable companies.
In conclusion, evaluating start-ups is a multifaceted process that requires both quantitative analysis and qualitative judgment. My decade of experience in the trenches of the start-up world informs every aspect of this evaluation, ensuring that I partner with companies that have the potential to make a significant impact in their respective domains.