How much do you invest?
The smallest investment we have ever made is $50,000 and the largest is $3,200,000. Generally we invest alongside other, experienced private investors or top-tier venture firms. We also help introduce you to the right venture capital firms when and if you have larger funding needs in the future.
What do you do for start-ups?
We help start-ups accelerate their growth, supporting their efforts in the following areas:
What do you look for in an investment?
- Identifying key opportunities to generate profitable revenues
- Determining what not to do, in addition to pursuing the most important opportunities
- Attracting and hiring the most qualified people
- Finding like-minded partners who can help you achieve your goals faster
- Avoiding unnecessary competition by focusing on the areas that create the most value for your customers
- Generating enthusiasm inside and outside the company
- Linking you to the best, most readily available financing
- Visionary Founder: We like founders who have discovered something important before the rest of the world, based on an authentic and specific knowledge of a major technology change event.
- Huge Potential Market: "Potential" market is key here. We are not looking for a complex analysis of big, existing markets, as we realize that existing companies can serve them if they are this obvious. But the potential for a huge outcome must be present, even if the path is uncertain and likely to change.
- Unfair Advantage: What is the most defensible element to your business? It can be a technology advantage, a business model advantage, or a network effect, but it must be real.
- Low Capital Requirements: In our view, the most sustainable technology companies (such as Microsoft, eBay, Google, Cisco, Yahoo, and many others) paradoxically consume very little capital on their way to immense profits. Even companies that raise a lot of money eventually (Twitter, Facebook, and others like them) are generally able to demonstrate proof of critical mass without consuming a lot of capital at the outset.
What markets and technologies do you invest in?
We are experienced in a number of different markets and technologies, including hardware, software, small business, enterprise, Internet, B2B and consumer markets. Our technology clients range from enterprise CIOs, cable and telco executives, and defense contractors to 18-year-old innovators and even Hollywood effects studios. That means we consider a wide variety of good ideas that are technology-related.
Do you have a preference for where companies are located?
Due to our small size, we prefer to work with companies located in either the San Francisco Bay Area or in Austin, Texas. On rare occasions we have also invested in New York. While we have found that many very successful startups are located elsewhere, many seed stage companies would like frequent contact with their investors and we can only provide the high level of service they expect if we are more geographically focused.
What is the best way for me to approach FLOODGATE?
We prefer to receive business plans through a referral. If you can get someone we know and trust excited about your idea, we would be interested in learning more about it.
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