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#9 Investment Stage Selection

Returns maximization is the fiduciary responsibility of every fund manager! So what’s the most suitable stage for an investor’s participation in a startup?

There is no one right answer to this question and every investor needs to evaluate what’s right for them…driven primarily by what value-addition she/he brings beyond capital!

For example, if your strengths are in helping in product design, setting up technology stacks, develop and pilot business models, etc., it’s best you put those to work and engage / invest in early-stage companies which are still building their value-proposition and seeking the most meaningful way to do so!

On the other hand, if your core strengths are in the ability to enable go-to-market opportunities, new geographies, tapping into new customers, evolving business models, and driving scale thinking, then your best bet is to invest in companies that have established a certain scale and commercial validation.

We at Cornerstone, certainly are the later kind, and simply follow a few handful of directional principles:

  1. Established product-market fit - implies engaged and paying customers
  2. Validated commercials - basis proven value proposition that’s solving a valid real-world problem for a customer
  3. Global relevance - ability to replicate the success achieved in new markets and new segments

Having said this, of course once in a way we come across founders who, though early in their journey, bring deep domain expertise, and are solving a large interesting problems which have the potential to create tremendous value; Our 10^12 Program caters to exactly this!

Most of all it’s important that engaging with a startup, whatever stage, has to be mentally stimulating and professionally gratifying for an investor - else what’s she/he doing on the cap-table anyway?

- Abhishek

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