Investment Criteria

Over the past few weeks, I have received the same question a few times: "What motivates you to invest in a certain project or company?" Several months ago, I spent time thinking through this and outlined my personal filter for investing, and I wanted to share.

When I invest in a project, I want to do more than just write a check. (Truthfully, I haven't written a physical check in quite some time. I typically wire money for any personal investments, but you get my point.)

The following questions are a quick filter to make sure a project or business fits my investment criteria:

• Can I add value through my experience or network?

• Does it make me excited? Positive energy is one of Menlo Group's core values, and I want to make sure I am energized about all projects I invest in.

• Can I tell my kids about it? Originally this question was to eliminate any business that I wouldn't feel comfortable telling my kids about it, but now I find that if I can't explain a project to them then it is too complex for a simple mind like me.

• Do I have knowledge, passion, interest or synergy in this industry?

• Is this an active or passive investment? Will I receive a return on time spent? I want to give my time and add value, but I need to understand my time contribution to ensure I receive a great return on that time.

• What are the expectations if I invest? Will this be a one-time investment or a continued capital call? This factor is especially important on real estate deals.

• Do I trust the team can execute? I have heard from many people on LinkedIn that they only invest in second-time founders, but the funny thing is that everyone has to start somewhere. When I started my first company, many people told me I was crazy and wouldn't make it. I choose to trust then verify.

Hopefully this post contains some helpful information for other investors. I'd love to hear about your investment criteria or any upcoming projects you may have. Feel free to email me at tanner@menlocre.com.