4 principles of thesis-driven investing
I’m not smart enough to invest in everything that comes my way. I need to focus onto areas where I can build a concentration of capability.
In deep tech, some of the areas we look at are so complex that it can take a long time to get to the starting line of understanding.
In our Feed 10b People challenge area in Main Sequence, I am ready for a conversation. Ready to go on an adventure to understand what is possible.
#1 — Light a beacon to attract the ideas
A clearly stated thesis works like a marketing campaign and a filter. It is a signal to the world about what we are interested in and sharpens the inbound flow of ideas.
#2 — Activate the ‘truffle nose’
Working in concentrated theme activates a ‘truffle nose’ which is calibrated to sniff out market problems that no one has solved yet. For example, working with v2food surfaced the need for animal free fats which led to Nourish.
Outbound opportunity creation is more targeted.
#3 — Grow a network that wants the same thing
A network of other organisations and people with a similar conviction grows. They can help build strength in the portfolio.
- Startups to collaborate to get to value in the market faster
- Corporates to provide market insight and go-to-market advantage
- Research organisations who lead relevant fields
- Investors who want to co-invest
#4 — Flow not containment
The risk of thesis-based investing is that it becomes a blindspot. It should not be built like a cage that can’t be breached. Let the ideas flow and let thesis grow with your thinking.
For example, in our work in food we have observed a strong adjacency with materials. Companies are using common science, production methods and networks to develop new sustainable materials.
I am still open to an entirely new idea.
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