One of my favourite growth hacking blogs is the Groove blog where it’s founder Alex Turnbull blogs about his day-to-day experience of growing his start-up. Alex’s posts are very insightful and he helpfully shares both the strategies and tactics that he uses. If you don’t follow his blog, do so now!

In a recent blog post, he talks about the investment that his startup received from Angel investor David Hauser. David is the co-founder and former CEO of Grasshopper, which was acquired earlier this year by Citrix. He is also a serial tech investor and entrepreneur.

David has a sensible approach to investing in companies that I can relate to. I have shared below his investment perspective below that appears on his Angel page and also shared by Alex on his blog.

Investment Perspective

  • Solve a real problem Making things a little easier or small improvements are not good enough, we need to solve real problems people have.

  • Passion not opportunity A true passion for an industry, concept or idea is much more powerful than the size of the market. Don’t just go looking for big markets with big opportunities, find passion first.

  • Revenue and business model are important The “build something massive, scale it and figure out revenue later” model works for very few if any companies. Having real customers, paying real money is critical and the best form of validation and traction. It is a big plus if it is recurring.

  • Culture makes a company It really matters and culture is what allows some companies to execute where others fail. From core values and core purpose to treating everyone as partners, it is all important and comes from the founders.

  • Silicon Valley is not the only place to build companies Amazing companies can be built outside of Silicon Valley, New York, Boston and other “hubs” and more and more so it is a competitive advantage to not be competing for the same, expensive and limited talent pool.

  • Remote cultures can work Having an office is great but having a remote team can also work, it is not always easy and hybrid, office and remote, is near impossible. For those that are passionate and dedicated to making it work, the benefits are huge.

  • Paid advertising works Content marketing, SEO, viral, social and all great channels should not be ignored but neither should paid advertising. It might be cool to say “we don’t pay for advertising” but paid advertising channels, both online and offline, just work and any company that ignores this is missing a big opportunity.

  • Bootstrapping is possible Startup costs continue to drop, making bootstrapping even more possible. Founders can get much further with much less and should. Taking on money can be a nice accelerator and even open up networks and access not before possible but it should not change the culture.

  • Series A, B, C is broken in many cases The endless cycle of raise and raise again is mostly broken. It allows large funds to put more and more money to work but kills many great companies along the way. When companies doing $50m+ a year in revenue are not thought of as a success, there is a problem. The goal should be sustainable and profitable growth, not hitting some fake metrics to raise the next round of financing.