6-Factor Investment Thesis

At Allied Venture Partners, we follow a strict 6-Factor Investment Thesis, honed by many years of investing in early-stage technology startups.

1) Infrastructure-layer Software

We invest in software companies building the underlying core infrastructure to enable and democratize access among large and rapidly expanding markets.

These markets include AI/ML, platforms, marketplaces, APIs, fintech, and enterprise software.

Our focus on the software infrastructure layer enables greater scalability and lower capital requirements, allowing for faster experimentation, validation, and growth.

We are industry agnostic except for Bio/Med/Health, Climate, Cannabis, and GovTech.

Our geographic focus is North America (i.e., companies registered in the USA or Canada), with a maximum post-money valuation of $25MM USD. Our typical check size is $100k to $350k USD.

2) Talented Teams with Strong Domain Expertise

We invest in exceptional founding teams with the passion, focus, and unwavering determination to execute their vision and bring their product to life.

Founding teams should include the necessary technical knowledge, experience, and complementary skill sets to achieve initial scale (i.e., founder-market fit).

Additionally, we look for founders who demonstrate self-awareness of potential skill gaps and have a clear roadmap for filling strategic positions after raising capital.

We strive to invest in the most credible, resilient, driven, and knowledgeable founders eager to surround themselves with talented people.

3) Post-Revenue with Signs of Early Traction

We invest in startups that have built a minimum viable product (MVP) and have begun generating revenue from external customers (i.e., strangers, not friends or family).

We typically invest in a startup once they have reached $3k to $5k MRR and can show 3 to 6 months of consistent revenue growth, with the ability to obtain feedback and reviews from early customers.

Such traction provides strong initial signs of product-market fit while solving a legitimate pain point among a sizeable target market.

Note: Even if your startup is pre-revenue, we encourage you to complete the application form and get on our radar.

4) Early-Stage (Seed to Series A)

We invest in startups that have yet to raise their Series A (i.e., Pre-Seed, Seed, Seed+, or actively raising a Series A).

By doing so, we ensure meaningful ownership at a reasonable valuation, thereby minimizing dilution from subsequent funding rounds and creating greater long-term value for stakeholders.

Furthermore, we only invest in startups where the founder has granted us pro-rata rights alongside our initial investment. This allows us to maintain our equity ownership in follow-on rounds while continuing to support the company long-term.

5) Capital Efficient with a Path to Profitability

We invest in startups where the founders have a clear focus and appreciation for capital efficiency, with a minimum runway of at least 16 months following the capital raise.

The company should demonstrate early evidence of efficient customer acquisition (CAC), whereby additional venture capital funding will optimize and scale the company’s growth engine flywheel and subsequent competitive edge, thereby improving CAC:LTV towards sustained profitability.

As venture investors, focusing on capital efficiency and improving unit economics ensures long-term profitability and sustainability, thereby increasing the company's attractiveness for downstream funding or acquisition.

6) Meaningful and Sustainable Differentiation

We invest in startups that have discovered a unique and meaningful way to differentiate themselves in the marketplace, thereby creating a larger pie as opposed to a larger piece of the same pie (i.e., no "me too" products or services).

Although not always required, ideal startups possess some proprietary IP, trade secret, or technological moat, providing a competitive edge toward meaningful and sustainable differentiation.

Have questions? Please visit our respective FAQs for Founders and Investors

For a list of featured podcasts & articles covering the Allied investment thesis, visit allied.vc/news