David Jones

Key Quotes

What factors make a deal attractive to you?

• David: We look at management, market, and momentum. The quality of the founders and team probably accounts for 70% of our decision. The market also needs to be big, ideally $500M or greater. Email marketing was a good example. Everybody has email marketing. It's applicable to everybody. It's a huge market.
• The last thing for us is kind of nebulous; we call it momentum. Momentum has to do with how much measurable progress you’re making. Momentum can be measured with number of users, it can be eyeballs, it can be clicks, it can be revenue, it can be growth in the sector. For example, e-commerce continues to grow at a double-digit rate, whereas retail stores continue to fall.

What are some common mistakes founders make when fundraising?

• They raise too much money too early. A lot of founders believe their idea is the best idea in the world, when in reality, they should prove it out first–get to the point of being able to repeat success, and then step on the gas. Innovation happens with constraint. If you constrain the amount of capital you have, you’ll be forced to make better decisions, and then there will be a time to grow it. A lot of entrepreneurs will give away too much equity too early to a big name or what they think will be a big advisor. Conserve your equity. Your equity is your gold. The idea is that equity's going to be worth a heck of a lot more than anything else. Some entrepreneurs don’t pick the right investor. Do as much due diligence on an investor as they're doing on you. That's really, really important because it's truly a marriage but harder to get out of.

Career