Before launching Pique Fund, I essentially did a scan of what new business ventures and investment opportunities were out there and assessed whether there was investment product-investor market fit. I took the following things into consideration and this applies to someone investing their own capital in private ventures as much as it applies to someone deploying a pool of capital on behalf of others.

Investment Strategy

  1. I thought about what startups we still needed.
  2. I developed an investment thesis – a hypothesis or strategy describing the types of entrepreneurs and ventures that I believed had the potential for meeting my target investment returns and yielding the positive impact I wanted to see in the world.
  3. I tested whether there was investment product-investor market fit – this was to find the alignment amongst entrepreneurs and ventures seeking capital and financiers and investors with capital to deploy. Put another way, if an entrepreneur and venture is seeking capital, are there financiers and investors willing to invest and with what type of capital? What is that fit and do I want to be a part of that capital structure? Which entrepreneurs want the capital, advice, resources, and connections that I bring to the investment relationship?

With these three things in mind, I’m able to describe what I’m looking for in terms of the entrepreneur, size and stage of venture, the sector or impact within which a venture operates, and the type of capital required. This forms an investment strategy and criteria on which to base my search for investment opportunities.

Deal Flow

The next step in identifying new investment opportunities is developing the pipeline and nurturing deal flow. This includes actively searching for ventures that fit the investment strategy, telling trusted people in my network what I’m looking for, and fielding inquiries from entrepreneurs.

Evaluation

Evaluation is the third step in identifying new investment opportunities. Further vetting is required to determine whether opportunities actually fit our strategy. Pique Fund follows Integrated Investing, a complete and robust due diligence and evaluation methodology that helps me articulate the pros and cons of an opportunity and narrow down the field of possibilities to identify the opportunities we’re actually going to invest in.

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This post was originally published on Quora. Ask me anything on Quora.

For more impact investing resources and tools, including how to identify new investment opportunities, check out Integrated Investing: Impact Investing with Head, Heart, Body, and Soul, available at all major online book retailers.

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