Our take on company building
We believe in building long-lasting scalable businesses from day one.
At the seed stage, you shouldn’t be focused on hitting some arbitrary, long-run revenue target. Instead, you have to be laser-focused on proving that you can build a scalable, venture-backed business.
When we work with a seed company, we focus our energy on this north star. It requires a deep understanding of the market opportunities, of the customers, and of what the future holds.
We are not in a rush for the company to produce a hockey stick graph of revenue/time or for the company to hire at all costs. What’s much more important to us is to nail a winning long-term strategy. This often means we don’t advise our founders to spend marketing dollars until user engagement is optimized or to not take on multiple customers until they can retain and delight initial customers.
This approach requires patience. Not passive, but active patience – patience that allows you to learn along the way, to craft the right product, to iterate on the growth plan, and to only hire the A+ candidates.
We advise our companies to be nimble, be lean, and imprint the right DNA early on.
A company’s earliest days provide not just invaluable learning experiences, but also set the tone for the company’s culture in the long-run. Put simply, those early days get imprinted into the company’s DNA. If you are scrappy early on, that dynamic lasts. If you have to figure out how to survive, how to solve tough problems early on, that lasts too. If you don’t have it easy early on – that’s ok: you’re building a muscle of resiliency that will prove invaluable in the long-run.
For this reason, we advise our companies to practice restraint in hiring, fundraising, and spending. Smaller teams create more disruptive innovation, have higher levels of trust and move much faster. Companies that don’t throw money at every problem become more creative and focused on what matters most and tend to be more successful.
We’ll be right by your side through the inevitable tough moments.
As former founders ourselves, we know that building a business is not easy. There are many sleepless nights for entrepreneurs, and we regularly ask our founders: “what keeps you up at night?”. In the startup journey, there may be many of these moments: a customer that does not close, a hypothesis that did not prove to be true, a candidate you struggle to close.
Having backed hundreds of companies, we have seen these issues firsthand. We have the advantage of understanding that this is just part of the journey. When tough moments happen, we try to support founders in any way we can. We share how other companies we’ve worked with have recuperated. Our bottom-line: when challenges arise: we’ll help you quickly accept what’s going on and then focus your energy on how to make it better.
We are experts in iterations and pivots.
We back founders from the earliest days and have for a decade. At a company’s earliest stage, there is typically little proof of product-market fit. In fact, many companies we’ve backed haven’t even yet developed a full product and, as a result, have no actual customers. What’s important is that the founders have a good hypothesis – there is some market opportunity they can articulate and a reasonable way of testing it.
However, we (founders and investors) don’t always get it right. The initial hypothesis may not always be valid. This happens nearly half of the time at the pre-seed stage. That’s just part of the process. When it happens, we use the learnings to iterate on our vision. These are often called pivots, but they are really just steps in the journey. We love founders that understand that the journey isn’t always linear.
We back companies that are customer obsessed.
We believe that what is right for the customer will ultimately be right for the shareholder.
For this reason, we like companies that put the customer first at every stage. Early on, we believe in spending time in customer development, trying to deeply understand the customer needs. Some of our founders have spent years in an industry and bring that deep understanding to the table from the beginning, but if that’s not the case, it needs to be augmented. At Pear, we insist on constant customer development. We don’t believe in gut-feelings about products.
We believe in data driven businesses.
At Pear, we value data and use it to inform our decisions as a firm. The same way we have our KPIs, we believe data is important when running a business. Even for our pre-seed companies, we start by creating an operational plan with measurable goals for the next 12 months. We agree on how to measure progress. That way, we have a common language to understand how the company is doing.
We are laser focused on getting companies to the next stage.
We track and measure how many of our companies make it to Series A. For this reason, we are laser focused on making that happen.
When you are ready, we will prepare you well for a successful Series A raise by going through our Series A bootcamp.
We strongly believe that Pear is not just one person, so when we invest, all of our partners are ready to help.
Perhaps the biggest differentiation and strength of Pear is our core values. We are a team, and we all want the best for Pear, not our individual selves.
When we invest in a company you will work closely with one or two of us, but you get access to the entire Pear team. It is very rare that someone in our team has not worked with one of our portfolio companies in some way.