What we look for in Ventures

At Paloma, our mission is to identify groundbreaking ideas, nurture them from inception, and guide them to market success.

We're in the weeds with our ventures for at least 18 months; in the same slack channels, in the same daily stand-ups, experiencing the highs (and the lows), together. In short, we are your team.

Working so intensively with ventures means we have to be very selective during the application process. For every ~500 pitch decks we see we typically only work with 5. This means we can't play the volume game by betting on hundreds of ventures a year and hoping one or two will have outsized returns. Instead we have to believe that every startup we choose to partner with has the potential to become a venture scale business.

1. You know your industry like the back of your hand

Paloma can build world-class products. We also have ample experience launching ventures and guiding them to product market fit. Our venture portfolio is currently valued at over a quarter of a billion dollars (AUD) and we've helped companies like Afterpay scale their products to billion dollar acquisitions.

What we don't have is deep domain expertise in every industry. We love founders who know their industry inside out, understand the nuanced market dynamics and can identify trends or problems that someone from outside the industry would be blind to.

2. Your idea has the potential to get BIG

It's hard when we have to say no to businesses that are clearly going to be successful... but just not successful enough. This typically comes down to a few things:

• Your vision: Are you looking to build a unicorn? We're looking to create businesses that can reach at least $100m ARR.
• Your market: Who are your customers? How many of them are there? We're looking for big markets.
• Your model: The ideas we often get excited about are in underserved industries with big contract values, and high margin recurring revenue.
• Your right to win: If someone entered the market tomorrow with exactly the same idea, what makes you the winner?

3. You haven't built much (or anything!) yet

Ideally we like to come in on day 0. If you're pre-product and pre-revenue, that's the best time to speak to us. Building technology is expensive and it's better to get it right the first time.

Our approach is to work with founders to deeply understand their customer, what needs to be built and why. Often we'll start with a "first slice" to test hypotheses and market demand before building out a bigger product with more features.

More art than science

Whilst we lean on these criteria to help us select ventures, we'll never be able to perfectly predict which startup ideas will blow up and which will fail. We like founders who will challenge us, educate us and persuade us that we should work together.