Benson Oak Ventures Investment Strategy: Four Questions Approach
Updated Version!
The Benson Oak Ventures investment approach combines focused investment decision-making processes and principles with a post-investment approach predicated on adding value on the operational and strategic side.
Benson Oak Ventures invests with the goal to support big ideas led by visionary and execution-focused entrepreneurs aiming to build transformative companies, through multi-stage, high-conviction model of investment, leading both initial and later rounds.
Our investment focus is on Consumer and Digital SMB offerings which share common themes around mass market brand-building & go to market strategies as well as the importance of awesome UI and UX to complement technological breakthroughs. One of our first investments was in ZenGo, the first keyless crypto mobile wallet, as a great example of tech breakthrough meeting delightful UI to drive global traction and brand.
Digital SMB investments concentrate on those products and services commonly utilized by large companies and now accessible for SMBs. SMB-focused companies such as Shopify, GoDaddy and Wix as well as recently public traded companies such as Zoom, Dropbox and DocuSign use technology to provide core operational features that help SMBs to operate, grow and scale their businesses. SMB-focused products within the Benson Oak portfolio includes video marketing tools from PROMO and financing optimization made available by BECOME.
Platform businesses combine B2B & SMB revenue models with own community that enhance the business model.They thus create new industries and marketplaces with a virtuous circle of sticky product offering with loyal user base, leveraging similar go-to-market and brand-building methods as classic B2C. We see the passion economy as a key aspect for these future platform businesses, an area we believe will evolve and expand into many unforeseen areas. We are dubbing a new market category called “Passion-ware” to represent as prime investment target for our future investments, as laid out in this post (and stay tuned for more details).
For B2C and Platform investments, our focus revolves around EdTech, Sports & Lifestyle and Fintech & Crypto, whether using B2C and B2B2C channels. These fields as areas particularly ripe for disruption, with a common theme -
creative solutions leveraging new delivery forms and devices, combining technical prowess and great user experience with innovative business models, thereby creating brand and communities.
Our portfolio includes and NY-based Harri, a platform which combines a SAAS offer for hospitality with community of candidates to create a new industry around Talent as a Service, along with two new companies to be announced.
The 4 Questions behind every investment decision
We look at potential investment, through the prism of overarching 4 questions
IS IT A MASS MARKET COMPANY? Does the solution disrupt and/or enable efficiencies in an enormous target market? The focus of this question is on assessing whether there is a large market opportunity addressable through mass market scale, and disruption can be through technology or business model. A potential mass market company is addressing immense & global problems with creative technology and/or solutions, aiming to build companies around audacious missions. We believe this is the basis for creating big businesses — the idea and the potential market itself must be transformational in scope.
HOW WILL YOU WIN? Can the team scale the brand and build a long-term advantage, user base and scale to millions? There are enormous risks inherent in creating truly disruptive markets — therefore, we must believe we are investing with a team that can build a long-term advantage by building a brand and user base and scaling it to millions. “Founder Market Fit” is required for competitive advantage, network and complementary experience and know-how, beyond just “identifying a problem”. A separate post will follow discussing founder market fit in context of our new deals.
WILL WE ADD VALUE? We seek to lead investments and work with entrepreneurs to form value-added investment consortiums. Adding value post-investment is part and parcel of the conviction model and can take on different forms, and in the case of most deals, we seek co-investors who can complement key gaps in our own experience, network and knowledge. We have led the rounds in 6 of 7 portfolio companies including a follow-on top-round.
IS THE BUSINESS MODEL SCALABLE AND SELF-SUFFICIENT. Is the business model scalable and self-sufficient? Does it leverage network effects to scale? We do not want our companies to be dependent on external financing forever and view a sustainable business model as the foundation for winning position and maximizing options. Moreover, we strongly believe in the power or community to sustain brands and engender better business models.
For those entrepreneurs pitching us, please be prepared to address these points in your materials and investor presentation and suggest you pay particular attention to the concept of Founder Market Fit in your internal planning and hiring and external pitching.
We are very excited about the transformative nature of our portfolio. Please check out our other posts on the rationale underlying our investment decisions using this 4 Question Methodology.