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What We Look for When Investing in Startups

February 21, 2023
Written by Golden Section


We consider ourselves a unique VC firm, not only in terms of how we approach funding (with a capital efficiency mindset), but in how we approach the entire journey when building a B2B SaaS or Enterprise Software company. We don’t invest in founders and leave them to steer through the thorny bushes of entrepreneurship alone. 

We journey together, relying on each founder’s unique expertise while lending our own experience and know-how to guide every individual startup in its journey toward a meaningful exit. 

Because we have a unique vision, we look for suitable partners to invest in. Founders and startups that share our vision and our methods of achieving success. Founders who fly solo and only want to work alone are not likely to enjoy working with our team of experts, though experts they be. We approach every investment as a team effort, one in which every voice in the team speaks and is heard.  

In addition to sharing a similar overall ideology, there are several technical aspects we consider when evaluating our next investment. 

Here are 10 things we look for when investing in startups (and founders): 

  1. B2B SaaS or Enterprise Software: This is our specialty and our main area of expertise. We’re looking to invest in startups that define themselves as part of the B2B SaaS or Enterprise Software sector.  
  1. Starting at the beginning: We like to join forces at the beginning of a startup’s journey, or as close to the beginning as possible. Therefore, we look for startups that need pre-seed and seed rounds of funding. Series A is generally the latest stage that we will come on board.  
  1. Reasonable valuation & capital efficiency: We’re not interested in hype and aren’t impressed by huge numbers. We’re more impressed with how capital efficient a startup is. In fact, we’re certain that startups that place a heavy emphasis on capital efficiency fare better than those that don’t. While we do seek a reasonable valuation, it’s equally important that founders are willing to work in a capital efficient manner.  
  1. Meaningful exits: Our goal is to build a solid startup so founders can have a meaningful exit in three to five years. Founders who are looking to scale with no end in sight would do better with a VC firm that espouses that particular vision.  
  1. Product-market fit: We want an indication of a general product-market fit, i.e. that there is an audience for any given product. This must be backed up by data and research.  
  1. Acknowledging and learning from mistakes: We’ve been doing this for over 10 years and have had many successes, but we’ve also made and witnessed many mistakes. We don’t believe in sweeping mistakes under the rug. We believe in highlighting them because they are incredible learning opportunities. We seek founders with the same attitude.  
  1. Founder expertise and involvement: We value founders who have domain or subject matter expertise, and who have been working in their industries for at least several years. We also look for founders who want and know how to get their hands dirty in the nitty-gritty of building a company from the ground-up.  
  1. Humility: While we admire founders with experience, we also seek those with humility, those who are willing to work with a team in which everyone has different strong suits. Golden Section is  a flourishing community, and the reason it works so well is because of everyone’s openness to learn.  
  1. Commitment to balance: We’re all for dedication and unflagging enthusiasm, but we also recognize the benefits of maintaining a healthy work-life balance. Not only will it help founders avoid burnout, but it will help create a healthy work culture that’s successful on many different levels. 
  1. Pain relievers: If you have a headache, you take a pain reliever and feel better. You can take vitamins too, but they don’t actually prevent the pain, they’re just a nice feature you add to your healthcare routine. When we look for products, we look for pain-relievers, not nice additional features that may or may not be necessary.  

Finding the Right Partners 

We’re the first ones to admit that Golden Section may not be the best VC partner for everyone. At the same time, the right startups can flourish when they team up with our team. If you’re a B2B SaaS founder who shares our vision for teamwork and growth toward a meaningful exit, we should speak 

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