One of the key conversations that happens during NextView’s evaluation of an investment is the “debrief” after the partner meeting, where the entire partnership gets the opportunity to interact with the founding team and dive deeper into the business.
During the debrief, we would discuss not only aspects of the company (i.e. team, market, product, stage/traction) but also the potential deal itself (i.e. how much the company is raising, valuation expectations, round/syndicate dynamics, etc.). Combining the variables of these two dimensions would sometimes lead one of us to say that this is a “doable deal”, as in “Well, they have decent traction and this seems like a reasonable market. I can see this being a doable deal at an $X pre-money valuation with a $Y check from us.”
“Dobale deals” are not inherently good or bad, but they’re just doable. More often than not, when this is the sentiment around the table without an enthusiastic voice of high conviction, we would decide not to proceed. Why, you might ask – isn’t it the job of a VC to do deals that are doable?
At NextView, we have a high-conviction, hands-on approach to investing. Our conviction-based decision-making process relies on at least one partner who truly believes and is enthusiastic about the prospect of doing hands-on work over a multi-year partnership with the founders. A potential investment being a “doable deal” is a great box to check (as the opposite is tricky in its own way), and occasionally the allure of doing a deal just because it seems reasonable enough is high.
When we hear one of us saying that a potential investment is a “doable deal”, it’s a great reminder to stay disciplined and really only move forward with strong conviction.