Matrix is an early-stage venture firm (idea through Series A) that invests with conviction in founders who have deep technical expertise and a specific vision of the future. They describe their portfolio as challengers, contrarians, risk-takers, and status-quo-breakers, and themselves as a close-knit team of former founders who 'engage early, wear well, and are steady.' Much of the firm's published playbook is grounded in its own 'For Entrepreneurs' / Matrix Partners Viewpoints content, where unit-economics rigor (LTV:CAC, CAC payback, churn) and market-need validation are treated as the make-or-break tests of a venture-scale business.
A real, validated market need with buyers in acute pain; founders should have done dozens of non-friendly customer conversations before building.
“A major reason why companies fail, is that they run into the problem of their being little or no market for the product that they have built.” — 6 Reasons Startups Fail
“There is not a compelling enough value proposition, or compelling event, to cause the buyer to actually commit to purchasing.” — David Skok
“Our experience indicates that it takes about 50 conversations with customers that are not friends to find out if the product concept is really going to sell.” — David Skok
A product from a technically deep team that meets a real market need; expect the first version to miss and require iteration toward fit.
“Most of the time the first product that a startup brings to market won't meet the market need.” — 6 Reasons Startups Fail
“The beauty of their product execution lies in the set-it-and-forget-it experience.” — Jake Jolis
“Founders who have deep technical expertise and a specific vision of the future.” — Matrix - firm site
A large, growing market tied to a structural shift; quantify the scale of the pain and the population affected.
“The trillion-dollar financial services industry was going to be turned on its head over the next decade.” — Matrix FinTech Index: 2020 Edition
“1099 recipients unknowingly overpay the IRS by $60 billion every year.” — Jake Jolis
“Independent workers now make up 30% of the US working age population.” — Jake Jolis
Evidence of product/market fit, especially low churn / strong retention; for SaaS, signals you can repeatably and scalably sell.
“They will be looking at churn as a great indicator of whether or not you have good product/market fit.” — Unlocking the Path to Negative Churn
“High churn is usually a clear indication that your product is not meeting customers needs or expectations.” — David Skok
“Getting to negative churn is one of the most powerful accelerators for growth.” — David Skok
Technically deep, contrarian founders with a specific vision; the CEO must be able to sell (recruit, fundraise, close first customers).
“Founders who have deep technical expertise and a specific vision of the future.” — Matrix - firm site
“Being a CEO is selling (recruiting, fundraising, getting your first customers and partners) and showing you can do it well is a reasonable expectation from investors.” — David Skok
“Investors are not just evaluating your business, but also what kind of person you are going to be to work with.” — David Skok
Unit economics that work: LTV well above CAC (3x+), CAC recovered in under ~12 months, and a scalable acquisition motion.
“The best SaaS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8.” — SaaS Metrics 2.0 - A Guide to Measuring and Improving what Matters
“if you would like to have a capital efficient business, I believe you will find that it is important to recover the cost of acquiring your customers in under 12 months.” — David Skok
“The cost of acquiring the customer (CAC) is actually higher than the lifetime value of that customer (LTV).” — David Skok
A contrarian, status-quo-breaking wedge that disrupts incumbents; don't hand-wave away competitive risks.
“Challengers, contrarians, risk-takers, and status-quo-breakers.” — Matrix - firm site
“Hand waving doesn't make them go away, it just makes your audience lose confidence in you and feel that you are trying to hide something.” — David Skok
“SaaS (e.g. Salesforce.com disrupting a market dominated by Siebel and others)” — David Skok
A clear timing thesis tied to a structural shift or innovation wave that makes the company inevitable now.
“Two years ago, we created the Matrix FinTech Index to highlight what we saw as the beginnings of a 10+ year major innovation wave in financial services.” — Matrix FinTech Index: 2020 Edition
“It's inevitable that online labor marketplaces will drive the majority of all new job creation in the future.” — Jake Jolis
“the innovation cycle continues, and we are transitioning into its mid-phase” — Jake Jolis
A pitch that reads as a conversation selling a vision, not a slide-by-slide recital; the founder weaves facts into a narrative and reads the room.
“More important than the specific slides you present is how you weave them together to convince and inspire your audience that you are going to build a successful company.” — Five Ways to Nail your Pitch and Win Over Investors
“The best pitch is a conversation rather than a sales pitch.” — David Skok
“The key to a great narrative is to identify your strengths and build your story around that.” — David Skok
“A major reason why companies fail, is that they run into the problem of their being little or no market for the product that they have built.”
“Two years ago, we created the Matrix FinTech Index to highlight what we saw as the beginnings of a 10+ year major innovation wave in financial services.”
“Founders who have deep technical expertise and a specific vision of the future.”
“Challengers, contrarians, risk-takers, and status-quo-breakers.”