July 23, 2018

Are You a Glass Eater?

by mike smerklo

(NOTE – This post was written and distributed via Next Coast Ventures E2E Blog Series

We often get asked what an ideal investment looks like for us. What metrics do we look at to assess a business model? What’s our sweet spot? What makes us write the check?

Listen to our co-founder Michael Smerklo’s full breakdown of what makes us write the check:

We joke that we have a highly proprietary secret formula, unique to us, that’s been developed in a lab after years of trial and error. We joke because so much of venture investing relies on going with your gut and focusing more on the people you choose to work with than on the business ideas you choose to work on.

But when we get asked about what makes our firm write a check, we reveal that our “secret formula” boils down to: Is it a big market? Is their solution disruptive? Is it a business play or sector we know about? And most importantly: is the entrepreneur a glass eater?

This is where the gut part comes in. If the business model is disruptive, the market is huge and the margins are great, none of that matters if the entrepreneur is not relentless about improving and growing the business. We spend a lot of time on entrepreneur-to-market fit, more than other firms in our opinion, and that means more than just determining if the entrepreneur well-positioned to build a great business.

“Glass · eat·er (noun): an entrepreneur that simply will not quit”

We have that term that we call a glass eater. If you’ve ever met an entrepreneur that will not quit, where he or she is committed day in and day out to building an amazing business, that’s a glass eater. It’s almost maniacal. But frankly, that’s the type of mentality you HAVE to have because the odds are so stacked against you in this business.

Just think of how many panels have you sat through where you hear CEOs talk about how “tough” it is to be a founder and the “challenges” and “difficulties” of starting a business. And those are the people who have had great success! Those are glass eaters that have reaped the benefits of swallowing all that glass and have tasted success. Imagine what it takes to keep swallowing all those hardships and sacrifices when you still haven’t gotten to that point. And to wake up every morning and it all over again.

That’s the commitment and the drive we’re looking to partner with. That’s what makes us write the check. So before you make the decision to quit your job, you have to do a gut check to make sure you’re ready for the glass-eating level of commitment entrepreneurship will ask of you.