Better Financial Tools / Resources for Lower and Middle Class There is an unacceptably large knowledge gap that a large percentage of the population has concerning personal finances. Better education & tools, perhaps even at the high school level, are desperately needed. Also, if there are any entrepreneurs out there with a way to improve the pay day loan industry for the consumer, I’d love to talk to them.
Companies building the best & largest datasets in their markets The best dataset is generally worth more than the best algorithm, especially if the dataset is very difficult and expensive ( or practically impossible ) to build elsewhere. I’m less concerned with what market the dataset addresses and much more concerned whether it is ( or can be ) the best dataset that market.
Businesses that level the playing field by enabling others to be more competitive. OK, so some of the best businesses, at least from the perspective of those who share the economic upside, are monopolies. Monopolies are able to charge prices significantly above their costs because there is at least one (often large) barrier preventing competitive options. Some of these barriers are enduring and highly defensible moats, but not all. I want to invest in businesses that challenge monopolies at their vulnerable points. One way to do this is for a start-up to to democratize an industry and enable others to be more competitive by provider tools and platforms that chip away at a monopoly’s competitive moats.
Capital to Cash Flow If I can buy an asset with a record of generating a fair cash flow ( e.g. an apartment building is the most basic version of this ), my checkbook opens a lot quicker ( and many, many times wider than my typical early-stage check ). Business ideas do not need to be a traditional VC return model, just an adequate risk-adjusted return on capital invested. This gets more into the venture debt realm of things and there are existing players that already do this; however, they tend to skew towards a higher scale. If you have a workable, proven model with positive cash-flow, my assertion is that you should have options to finance the growth of that business without having to trade in equity.
If your company falls into one of these categories above, reach to me @dan_relihan.