Portfolio Philosophy

At RSCM, we strive to construct a diversified portfolio, much like one would in traditional equities markets. We invest in many companies at a consistent rate. We screen for a set of characteristics that defines an asset class we believe to have high returns. We try to spread out risk along a number of dimensions.

The first step in building a diversified portfolio is taking a sufficient number of positions given the risk associated with each investment. Our modeling shows a portfolio of pre-seed technology startups should number in the hundreds. So we've been ramping up our capacity to make hundreds of investments per year.

2018investmentsgraph

In addition to being diversified across many startups, we want to make sure we aren't too concentrated in any particular type of startup. A great example is geography. While the San Francisco Bay and New York Metropolitan areas are major startup hubs, we make sure our portfolio is spread across the US and, to some extent, across the world.

2018geographicbreakdown

Beyond diversification, we also prize survival. One of our core beliefs is that pre-seed startups are primarily about option value, not enterprise value. The value of an option is proportional to how long it lasts. Essentially, the longer a startup is around, the more opportunity there is for good things to happen to it. Selecting for survivability across the entire portfolio will increase the realized value from those options on average.

With the general trend of greater tech startup capital efficiency and the ability to get farther faster, it's actually possible to select for initial revenue and low burn at the seed stage. So these factors weigh pretty heavily in our scorecard for investment opportunities.

We track survivability over time. The graph below shows the 1 through 5 year survival rates for each of our yearly portfolio investment cohorts (that are old enough for that survival time to make sense).

2018survivalgraph

Active 2017 Investments

4Degrees Hanzo Rakam
7 Chord Harbor Pension Rapid RMS
Abode Hawthorne RealBlocks
Agora Hazel RealSynth
Air Tailor Health Hero Robin
Aiva HealthTensor Rodin
Alice's Table Heartbeat Roof.ai
Allie Hostfully Savitude
Ampogee Hurdl ScaleFactor
Apollo HypeHash Sea Machines Robotics
Apostrophe ICONYC Labs Seamless.ai
Arternal Immersed Seer Aerospace
Aspinity Inklocker SEEVA
Attentive Inscribe Semantica
Aumet Invio Seremedi
Avisare Invomatic Shimmur
Axle Travel Ironcore Silene Biotech
Bank Novo Jargon Slingshot Aerospace
Bild Kidsclub.io Solstice
Blank Slate Systems Kokko Somatic Labs
Bloveit Lab Fellows Sourcify
Blue Fever Landing Lion SpotCrowd
BOTique.ai LeadCrunch Stackery
Botnik LendTech Stackin'
BrainSpec Lightning AI Stateless
Breinify Litimetrics StoryXpress
BuildSimHub LIV Strayos
BYBE Local Crate Superpowered
CareAcademy Lorem SVRF
Carma Maslo Swag.com
CityCop Matchaful Sway
Coastline Market MoData Swym
Cogni Module Design SyncSpot
CoLoadX Monday Synswap
Compaas Narmi TALK Accounting
CrowdForce NexusEdge Terrene
CuePath Innovation Novel Effect TheMonetizr
Curv Obsess ThreatCare
D4DT OffGridBox Tinitell
Damon Omelas Trexo Robotics
DirecTech Labs Omni Labs Turing Advisory Group
Elliot OnSecondThought TypeLead
Envio Pacemaker Unicoaero
Ephemeral Paddle Unique.ai
Faber Paladin Upsie
FarmCrowdy Parakeet Valid8
Findmeashoe Pathspark Vartega
Fireflies Phone Wagon VendorTerm
Flye Pippa Vidrovr
Fomo Planetarians Virgo
Frame Health PlayFull Vitae Industries
Fraudmarc PopCom Vitally
Fullcast.io Prefix Voatz
Gather Prospectify Wave
Gatsby Pulse Labs Wheeli
Gridwise Qanta.ai Zego
GRIT Virtual Qeepsake ZenSports
Halion Displays Rainmakers Zube.io

Active 2016 Investments

AdvisorConnect Grubbly Preesale
AirFox GymHit ProcessOut
Algocian HAAS Alert Purple
Analytical Flavor Systems Healthie Quantac
Arena Heartbeat Rally Bus
Ascerta HelloHome ResponsiveAds
Backstitch Indio Roam Solutions
Balloonr Inscope Medical Solutions Rocketbook
Bark Technologies Intelligent Layer RushTix
BookBuses IOPipe Saige
Boon Itsbyu Seed&Spark
BraIQ Jiobit Select Innovations
Branch Messenger Join Sequr
Bridge21 Joonko Shoelace
Bright Kami Shyft
Candidly Keepe SimpliRoute
CareerLark Kepler Communication SkopeNow
Cargo Lab Fellows Skycision
CarServ Legal Passage Skywatch
Chowbotics Leka Social Status
Chroma LogicGate Spatial
Converge Mantl Spoiler Alert
ConvertFlow Maxwell Spoken
Danger!Awesome MeetMindful Sprout
De-Ice MindMate Spruce Experience Platform
Donut Media Morty StoryFit
Drinkeasy MotionHall Straight Shot Accelerator
Drive Spotter Mycroft Stride.AI
DroneSeed Negotiatus Super Dispatch
edn NestReady Taylor & Hart
Electronic Gaming Federation Nozzle TEQ Charging
ERNIT OnFrontiers The Black Sheep
ExecVision onTarget The Helper Bees
Exeq Orderly Health TicketSauce
Feedmob Painless 1099 Trace
Fig Loans Paranoid Fan TrueCoach
Fitspot PartySlate UCIC
Flowcast Passage Union Crate
Fomo Patch Homes Unito
Forestry.io PenPal Schools Validated
Four Mine PermitZone Voyhoy
Fueloyal Pillar Technologies WELL Health
Galaxy.AI PlanSnap WorkHound
Gazella Wifi Polis XapiX
GoKid Pollen Xclaim Mobile
GoNative Polly Yaypay
GroGuru PopUp Play Yosko
Growth Instruments

Exited Investments

Aces Health Acquired by First Foundry, July 2018
AddStructure Acquired by Bizaarvoice, February 2018
AdHusky Acquired by undisclosed company, October 2015
Airpost Acquired by Box, December 2014
AkoubaCredit Acquired by Velocity Solutions, June 2018
Appetas Acquired by Google, April 2014
Appfuel Acquired by undisclosed company, April 2014
Augur Acquired by Bounce Exchange, March 2017
Beam Acquired by Microsoft, September 2016
Betaout Acquired by Undisclosed Company, June 2018
Bizible Acquired by Marketo, April 2018
Blueprint Registry Acquired by David's Bridal, August 2018
Brand AI Acquired by InVision App, August 2017
Careport Health Acquired by Allscripts Healthcare, October 2016
Classics & Exotics Acquired by Hagerty, June 2017
Codeship Acquired by CloudBees, Feb 2018
Conspire Acquired by FullContact, June 2016
Crowsnest Acquired by Samsung, November 2015
Daily Pnut Acquired by Media Mobilize, November 2016
DataBlade Acquired by Boston Consulting Group, February 2018
DealAngel Acquired by OneTwoTrip, August 2013
docTrackr Acquired by Intralinks, April 2014
Dossier Acquired by InVisionApp, September 2017
Draft Acquired by Betfair, May 2017
Email Copilot Acquired by Return Path & Seismic, November 2016
Eventable Acquired by Rockerbox, February 2018
Evolve Acquired by Hubspot, August 2017
Experiment Engine Acquired by Optimizely, April 2017
Fancred Acquired by Football Nation for no return
Filament Labs Acquired by Athenahealth, September 2016
Fosbury Acquired by Verve, June 2015
GetAFive Acquired by Tutor.com, August 2014
Glidera Acquired by Kraken, September 2016
Good.co Acquired by StepStone, January 2016
GoodApril Acquired by Intuit, August 2013
Hexa Acquired by Outboundworks, February 2018
init.ai Acquired by Apple, October 2017
Keen.io Acquired by Scaleworks, December 2017
Knowtify Acquired by Kissmetrics, May 2016
Legalinc Acquired by Undisclosed Company, February 2018
LiteStack Acquired by Rackspace, November 2013
Lumni Acquired by Lumni, May 2018
Mapkin Acquired by Mapquest, May 2016
Mediarails Acquired by Impact Holdings, August 2018
Mentio Acquired by Lendified, March 2016
MightySignal Acquired by Xenon Ventures, December 2018
MobileDevHQ Acquired by Tune, August 2014
MobilePhire Acquired by MobileSense Technologies, March 2018
Mortar Data Acquired by Datadog, February 2015
Nexosis Acquired by DataRobot, July 2018
Pathful Aqcuired by Mobify, April 2016
Pathgather Acquired by Degreed, June 2018
Pickie Acquired by RetailMeNot, April 2014
PillPack Acquired by Amazon, June 2018
Plated Acquired by Albertsons, September 2017
PlayCanvas Acquired by Snap, March 2017
Poptip Acquired by Palantir, July 2014
Reesio Acquired by Move.com, September 2015
Reflect Acquired by Puppet, June 2018
Revolv Acquired by Nest Labs, October 2014
Riskopy Acquired by Coupa, April 2017
Sameroom Acquired by 8x8, March 2017
Shopturn Acquired by PeerStream, October 2018
SpaceView Acquired by Atheer, June 2017
SPLT Acquired by Bosch, October 2017
Spoon University Acquired by Scripps Networks, May 2017
Strobe Acquired by LiveNation, June 2017
Super Acquired by Broomly, May 2017
Tapglue Acquired by Localytics, March 2017
tbh Acquired by Facebook, October 2017
TeacherTalent Acquired by EB Quickstart, December 2018
Thread Genius Acquired by Sotheby's, January 2018
TruClinic Acquired by InTouch Health, January 2018
Tutum Acquired by Docker, September 2015
UberSense Acquired by Hudl, August 2014
Ubooly Acquired by Sphero, February 2016
Vault Exposure Tracker Acquired by Envision Technologies, May 2018
Vendor Hawk Acquired by ServiceNow, April 2018
VerbalizeIt Acquired by Smartling, May 2016
Vidmaker Acquired by Youtube, December 2014
ZenPurchase Acquired by Coupa Software, January 2016
Ziibra Acquired by Tagboard, May 2016