Everyone has their own idea of what constitutes an investment strategy. While every industry has its own characteristics, and every investor has their own beliefs or preferences, we still believe there can be a standard approach to building a framework for investment strategy.

Our approach relies on a system of spheres, slices, and parameters where each sphere represents a broader category of parameters and each slice permeates multiple spheres.

For the sake of simplicity, we'll assume that:

• We are building a framework for software companies
• The seller is the same as the CEO - i.e. the company is not owned by a PE fund so most decisions to sell the company are made by the CEO.

Here's a quick mockup.

Seller

The seller is the inner sphere of our framework.

We might be interested to learn the following:

• How old is the CEO? Does it seem like he might be interested in retiring?
• Why does the CEO want to sell?
• Has the CEO been with ​​​​the company for a long time? If so, they're likely still the main shareholder.
• What is their professional or educational background?

You might want to know things such as financial distress but these datapoints will likely only come from lengthy relationships.

Company

The company is our second sphere - handling anything from employees to product offerings and financial results.

We might be interested to learn the following:

• How many employees does the company have? What's the size of the IT team?
• When was the company founded?
• Where is the company based? How many offices does it have?
• How many products does the company have? Are they cloud-based or on-premise?
• What's the pricing model? Is it license based or subscription?
• What functionality is present in the company's software products?
• What type of customer does the company serve?
• What is the company's revenue?
• Has the company raised any investment capital? How much? When was the last time?

Market

The market is our outermost sphere - handling aggregated metrics across all companies in the same industry.

We might be interested to learn the following:

• How many companies are in this market?
• How many of them have raised money? How many are still bootstrapped?
• How large is the market?
• What's the average size of each company?
• How many companies were founded recently?
• How many companies leverage AI in their products?
• Which investors are active in this industry? How active?
• Does the market have regulatory requirements?

Getting the data

Our Investment Strategy services ensure you have all the relevant data to empower your decision making.

• Some seller data is available from networking websites such as LinkedIn. The rest (such as reasons for selling, particularly personal/financial situatinos) can be collected from your team's interactions.
• Company data is often found on various parts of the website and can be extracted with Generative AI
• Market data is calculated by aggregating Company data