At Monk's Hill Ventures, we describe ourselves as "first principles investors." We break down businesses into their constituent elements and examine each building block. By eliminating assumptions and getting down to fundamental truths about the business, we’re then able to build up from those truths and draw our own conclusions on how a business intends to generate value for its customers.
Investing from first principles is about cutting out all the 'noise' around sectors, trends, and dogmas and answering at a foundational level the most critical questions needed to assess and de-risk any potential investment, those foundational factors that transcend cycles such as profitability, sustainability and true economic value capture.
Questions we typically ask about any potential portfolio company include:
- Is this sufficiently large? What value does the company create for its customers and ultimately how much of this market is actually available to the company?
- Are the company's founders and supporting key hires the right people to bring to life their transformative idea? And how can we help them realize their full potential?
- Is now the right time? Are we at some inflection point that makes now the opportune time to start this venture? Are we too early or too late?
- Does the company’s go-to-market strategy make sense? Will it be able to acquire users in a sustainable way as it scales?
- How much is the company worth today, and what is its potential worth in the future?
- How strong is the company's offering in relation to its competitors? Are there any structural barriers?
- What external factors, events and trends may impact the company’s ability to scale effectively? Both positively and negatively, for instance regulation, governmental
Our First Principles Approach
Our team consists of engineers, entrepreneurs, operators and investment specialists who understand how to break down business models then build an independent, clear view of a company's potential from the ground up. We're driven by a genuine curiosity about how companies work and how technology can better people's lives around the region. We also take the time to really get to know the entrepreneur and understand their aspirations and motivations.
When we talk about improving lives, we mean answering the fundamental needs of millions of people through creating new ways of doing, learning, living, working, moving, and consuming. We’re looking for companies that use technology to solve inefficiencies at scale, and provide profound value for investors and customers.
Without first principles, it's far too easy for the due diligence around companies to become cluttered and unfocused: today's fad may be tomorrow's failure.
By breaking down companies and spending significant time with founders, we're able to lessen the likelihood of failure by increasing the number of known factors in any potential investment while minimizing noise. This thesis has driven our investments in some of Southeast Asia's most exciting and successful technology companies, including Glints, Ninja Van, Horangi, ELSA, and many more.
Entrepreneurs backing entrepreneurs
As successful entrepreneurs ourselves, we know backing founders with knowledge, strategic support, and the right connections achieves better and more consistent returns over time. Our team has been where founders now sit; we understand the characteristics, attitudes, and thinking required to successfully grow and manage a new technology company. We are also able to empathize at a deeper level.
We go beyond personal gut feelings to dig deeper into a company's formation - from proper incorporation to taxes, ensuring no delinquencies and conducting a deeper level of character and reference checks. And, because we're investing in emerging markets, our due diligence tends to be heavier than that done in other regions because market practices in emerging markets are at times more flexible.
If you are an entrepreneur building a technology company taking a systems-based approach to solving big problems, we’d love to hear from you.