Investment criteria followed by iSelect Fund in selecting companies.

While all venture funds invest, how they invest varies. Given how iSelect raises funds, we have some key criteria we typically follow:

Investment Criteria

Lead Investor: Introduced by a trusted partner including venture funds, angel groups and family offices willing to lead the deal
Previous Investment: Previously raised $250k or more of investment
Stage: Late Seed or Series A
Deal: Preferred equity or a convertible debt (convertible into preferred equity)
Type: Prefer a 506(c) structure, general solicitation, but will also do 506(b)
Traction: Demonstrates meaningful early traction via customer orders, customer R&D investment, NIH grants, etc.
HQ: Company is located near key industry talent and customers
Plan: Clear milestones and path to follow on capital and exit
Valuation: Pre-money valuation less than $20M
Industry: Preference for healthcare (Biotech, Medtech, Devices), agriculture, and energy; less interested in B2C

Market Sectors and Industry

iSelect’s primary investment focus is Agriculture, Health Care, and Energy. We also have invested in enterprise software, materials, and financial services.

Caveats

iSelect is focused on closing the shortfall of investment capital nationwide. We syndicate institutional capital into venture stage opportunities. iSelect has invested in later-stage transactions. The criteria for these investments vary depending on the investment opportunity. We are always willing to listen. Because of our criteria and investment preferences, in the end, we typically only investing 2.5% of the companies we meet.

If you are earlier than the above criteria, we want to stay in touch and engaged so we can line things up when you are ready. We try to keep good notes on every company we meet so we can map out your capital needs well into the future.

Consideration

With 2021 well underway and with public markets still strong, we think it is an important time to highlight some of the key private market, venture investment themes that iSelect fund has identified for the year. We believe technologies transforming the Agriculture, Food and Wellness markets will flourish, with a focus on four areas: technologies that enable better food choices to drive better health outcomes, technologies that drive better, more profitable farm operations, technologies that drive the Consumerization of Healthcare, and biome-based treatment technologies. At iSelect, we invest for impact AND performance. We offer qualified investors access to emerging growth companies through our national venture capital strategy. Our unique structure allows our investors to continue to invest in these companies as they develop.

Timing

Why is now the right time for venture? The answer is that now is not explicitly the right time. Venture is something we need in our economy at all times. Now is not better than any other particular time. The question is, why ever stop? When we look at the challenges we’re facing in food and healthcare the reality is there is someone, somewhere who has an insight about how to build a product that will solve those problems. And if they put the right resources to it, they will succeed. As long as we need new technology to make life better or make our lives more enjoyable, we need venture capital to help fuel those entrepreneurs.

What is iSelect as a product?

iSelect is a very unique product, but when you break it into its parts it’s fairly easy to understand. On the front end we’re a traditional venture capital fund. We have a diligence process. We have an investment process. We have categories of industries where we have focus and real expertise, and we invest in companies in those areas that meet requirements for the fund. On the back end we’re unique in that we don’t raise a large amount of capital at one time and deploy it over the life of our fund. Each deal that we bring onto the fund, our investors have to prove and determine to invest in that deal. We have to constantly prove our diligence standards. It’s accessible, transparent and easy for investors to come in and see our comprehensive process.

What is the ideal iSelect company?

We are looking for founders that are passionate and we want the problem they’re trying to solve to be big, real, and painful. We want the solution to be revolutionary and we want our capital to be able to help them solve that problem. We want to know that they have customers involved and that the solution they’ve come up with actually meets those customers’ and market needs. And we want the team to be capital efficient with the money they’re spending.

What does the ideal iSelect company look like?

We’re looking for a company that has an opportunity to have a 10x return to our investment or greater in a period of three to seven years. What excites us at iSelect are companies that are solving big problems. We want companies that are going to be the Monsantos of the future. Not just in the size and the scope, but the impact they have on people’s lives. We want to create positive impacts on people’s lives, so we invest in areas like agricultural production and areas like producing healthy foods for our kids. They are problems that impact real people’s lives on a daily basis. That’s what we’re trying to do at iSelect. We’re trying to solve the big problems out there. Find ways to bring capital to the entrepreneurs who are the real heroes out there getting up every morning, beating away at these things that are problems that you and me and everyone else faces in their everyday lives.

What is iSelect?

iSelect is a venture capital firm. What that means is we look at hundreds and hundreds of different companies and we apply tough diligence standards to each of them, looking at whether the team has a good plan for growing the business, whether the team is qualified and credible, and more. We do that to resolve the few who provide the best opportunities for investors. And then iSelect takes that smaller set of investments and goes to investors who are interested in venture capital and provides a way for them to invest in these companies, either individually or all at once. We co-invest alongside other venture capitalists. We source transactions through to an exit where the company would become public or get bought. And we manage that whole investment process on behalf of our investors.

Investment Preferences