We believe the early stage is the most exciting time to get involved in a company as an active investor and so we focus on Seed-Series A rounds of financing. We like to write the first institutional check into a company with a typical initial investment of $500,000 to $4 million. We maintain reserves for each company and our expectation is that this commitment will increase over time.
The biggest factor in any early stage investment is the team. We look for management teams with a proven ability to execute, as indicated by past startup performance or the bootstrapped history of their current startup. In addition to their abilities in identifying exciting opportunities, we must also trust that our teams can pull off the mid-course corrections inevitably required for an early-stage company to become a market leader.
Trust goes both ways. We are the "go to" partner for our management teams, taking every opportunity to roll-up our sleeves and help with recruiting and strategy, as well as connections to other entrepreneurs, mentors and business partners. We believe in communication that is open, honest and direct.
While we celebrate the billion dollar exit, we realize most start-ups will exit for less and thus need to be capitalized such that all stakeholders can succeed. Too much capital early on can take away what may be attractive exit options later and mute an entrepreneur’s success through dilution.
The current environment presents entrepreneurs with lower start-up costs and more efficient distribution options. We favor capital efficient companies that understand the leverage of minimum-viable-product strategies on making informed, measured progress. As early stage investors, our incentives are aligned with yours
All of us on the Silverton investment team come from operating backgrounds and like to roll up our sleeves to help our portfolio companies. Our team has broad experience in leading high-growth companies in sectors ranging from consumer products to enterprise software, and we are sector-agnostic in what we will consider. If we can’t add value beyond our cash, we won’t invest.
While we are not geographically-restricted, the majority of our investments are in markets where an active startup ecosystem is underserved by early-stage capital. We have found that we do best when we are close to our management teams and have a bias towards companies based in Austin.