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.

rscminvestmentgraph4q2018

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.

rscmgeographygraph4q2017v2

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).

combinedsurvival4q2017larger2

Active 2017 Investments

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

Active 2016 Investments

Aces Health GroGuru Polly
AddStructure Growth Instruments Poln
AdvisorConnect Grubbly PopUp Play
AirFox GymHit Preesale
Algocian HAAS Alert ProcessOut
Analytical Flavor Systems Healthie Purple
Arena Heartbeat Quantac
Ascerta HelloHome Rally Bus
Backstitch Indio Real Meal Delivery
Baloonr Inscope Medical Solutions Reflect
Bamba Group Intelligent Layer Remidi
Bark Technologies IOPipe Resertrip
Blueprint Registry Itsbyu ResponsiveAds
Boon Jiobit Roam Solutions
BraIQ Joonko Rocketbook
Branch Messenger Kami Seed&Spark
Bridge21 Kandid.ly Select Innovations
Bright Keepe Separate.Us
CareerLark Kepler Communication Sequr
Cargo Lab Fellows Shoelace
CarServ LeBlum Shyft
Chowbotics Legalinc SimpliRoute
Chroma Leka SkopeNow
ContextSmith Lifecycle Skycision
Converge LogicGate Skywatch
ConvertFlow Mantl Spatial
Danger!Awesome Maxwell Spoiler Alert
De-Ice MeetMindful Spoken
Donut Media MindMate Sprout
Drinkeasy MobilePhire Spruce
Drive Spotter Morty StoryFit
DroneSeed MotionHall Stride.AI
Dronesmith Technologies Mycroft Super Dispatch
edn NaCa Fermentation Taylor & Hart
Electronic Gaming Federation Negotiatus The Black Sheep
ERNIT NestReady The Helper Bees
ExecVision Nexosis TicketSauce
Exeq Nozzle Trace
Feedmob OnFrontiers UCIC
Fig Loans onTarget Union Crate
Fitbot Orderly Health Unito
Fitspot Painless 1099 Urban3D
Flowcast Paranoid Fan Validated
Fomo PartySlate WELL Health
Forestry.io Passage Wise Apple
Four Mine Patch Homes WorkHound
Fueloyal PenPal Schools XapiX
Galaxy.AI PermitZone Xclaim Mobile
Gazella Wifi Pillar Technologies Yaypay
GoKid PlanSnap  
GoNative Polis  

Exited Investments

SPLT Acquired by Bosch, October 2017
init.ai Acquired by Apple, October 2017
Plated Acquired by Albertsons, September 2017
Dossier Acquired by InVisionApp, September 2017
Evolve Acquired by Hubspot, August 2017
Brand AI Acquired by InVision App, August 2017
Classics & Exotics Acquired by Hagerty, June 2017
Strobe Acquired by LiveNation, June 2017
Draft Acquired by Betfair, May 2017
Spoon University Acquired by Scripps Networks, May 2017
Riskopy Acquired by Coupa, April 2017
Experiment Engine Acquired by Optimizely, April 2017
Sameroom Acquired by 8x8, March 2017
PlayCanvas Acquired by Snap, March 2017
Augur Acquired by Bounce Exchange, March 2017
Tapglue Acquired by Localytics, March 2017
Daily Pnut Acquired by Media Mobilize, November 2016
Email Copilot Acquired by Return Path & Seismic, November 2016
Careport Health Acquired by Allscripts Healthcare, October 2016
Filament Labs Acquired by Athenahealth, September 2016
Beam Acquired by Microsoft, September 2016
Glidera Acquired by Kraken, September 2016
Conspire Acquired by FullContact, June 2016
VerbalizeIt Acquired by Smartling, May 2016
Mapkin Acquired by Mapquest, May 2016
Knowtify Acquired by Kissmetrics, May 2016
Ziibra Acquired by Tagboard, May 2016
Pathful Aqcuired by Mobify, April 2016
Ubooly Acquired by Sphero, February 2016
Mentio Acquired by Lendified, March 2016
Good.co Acquired by StepStone, January 2016
ZenPurchase Acquired by Coupa Software, January 2016
Crowsnest Acquired by Samsung, November 2015
AdHusky Acquired by undisclosed company, October 2015
Tutum Acquired by Docker, September 2015
Fosbury Acquired by Verve, June 2015
Reesio Acquired by Move.com, September 2015
Mortar Data Acquired by Datadog, February 2015
Vidmaker Acquired by Youtube, December 2014
Airpost Acquired by Box, December 2014
Revolv Acquired by Nest Labs, October 2014
Appfuel Acquired be undisclosed company, April 2014
UberSense Acquired by Hudl, August 2014
Poptip Acquired by Palantir, July 2014
docTrackr Acquired by Intralinks, April 2014
MobileDevHQ Acquired by Tune, August 2014
Appetas Acquired by Google, April 2014
GetAFive Acquired by Tutor.com, August 2014
Pickie Acquired by RetailMeNot, April 2014
DigitalOcean Partial sale into later round, March 2014
LiteStack Acquired by Rackspace, November 2013
DealAngel Acquired by OneTwoTrip, August 2013
GoodApril Acquired by Intuit, August 2013