Our Approach: Early capital to help makers make
How we approach investment
Over years of founding and investing in early stage businesses, our team has formed a tight investment thesis, allowing Maker Capital to identify high-potential companies that will flourish with our partnership and hence maximise returns to the fund.
We invest really early, taking on a lot of risk in any venture. Due to the early stage nature of our investing, we de-risk by not playing in certain areas.
We also have strong filters to expose ourselves to great companies, and more importantly, great founders.
Our investment focus areas
What we look for in a founder
Our purpose is working with passionate founders in purpose- driven companies, growing and helping them from their very first external capital raise.
Between Maker’s four general partners, we’ve founded or co- founded over 20 companies, including a substantial number within corporate New Zealand. We are entrepreneurs at heart, and love to get our hands dirty. We carry this ethos forward to our portfolio companies, where we are deeply operationally involved with the companies we partner with, fostering connections with founders that last years.
We get in at the ground floor, leading rounds and working with entrepreneurs as they grow their businesses and move from their first cheques, to seed rounds, to later investments. It’s a partnership that leads to enduring relationships.
Since 2018, our principals have collaborated and invested together. The positive results we have seen have led us to create Maker Capital Fund I. This document outlines our unique approach to purpose-driven early stage investing, our passions, and our investment principles.
How we filter potential investments
Solve a real problem in an existing value chain, not a new or nascent market
Disruptive products, platforms, and business models that address real problems in existing value chains.
We are not looking for companies with new solutions that have to find a problem, but companies that have already established product-market fit.
Mass-market focused: B2B/B2C/B2B2C, not enterprise
We prefer to invest in businesses where we can understand the unit economics early, establishing the fundamental viability of the business model as a precursor to achieving scale.
These companies tend to be B2C, B2B2C, or "mass-market" B2B. They are not enterprise or government focused.
These companies, operating in a data-driven mass- market rather than sales-driven managed-market, have more predictable and modellable revenue streams and are less exposed to the whims of enterprise decision-makers.
Tech enabled, not pure tech
While we have a deep respect for pure tech companies, we’re not in the business of taking moonshots.
We look for technology to enable the business to scale, not to be the business.
We prefer that execution risk is minimised: we want our founders to be able to focus on scaling their offering rather than having to worrying about whether they’ll ever manage to develop it!
Investment criteria /deal evaluation
Before investing in any company, we undertake a five-pronged process.
Our process is extensive, in keeping with our quality over quantity approach. We target investing in around 4-6 new companies a year, and work closely with founders for years.
We need to ensure the chemistry is right. This process is useful for startups as it forces them to dig deep to extract insights about their own business. We can move quickly in the case of follow-on investment, but absolutely will not join the funds that are “spraying and praying” at extraordinary speeds.
Our Investment Timeline
01
First date
Principal (sponsor) meets with founder casually, building a relationship. Anyone can be a sponsor of a deal. The journey starts with people.
02
Sponsor pitch
When sponsor senses the possibility of investment, sponsor obtains a pitch deck, sends to our investment committee (IC) for a preliminary conversation. IC may reject a deal that doesn’t meet investment criteria, in which case the company goes back to the dating stage (it may come back for another sponsor pitch later).
03
Founder Pitch
If IC likes the deal, founder formally pitches to fund. An intensive and collaborative due diligence (DD) process between company and Maker kicks off:
Founder evaluation
Financial and legal DD
Technical DD
Evaluation of Maker value-add capabilities
04
Investment + value-add
If investment occurs, Maker works with the company to add value and grow the company.
05
Ongoing portfolio management
Maker may invest further in a company in further rounds, in which case steps (02) to (03) would reoccur, and Maker will work with founders to exit as appropriate.