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Hyperactive Investors

Investors that are in a hyperactive phase are great targets — these are typically firms that have raised significant capital and are now in a deployment spree. For such investors, the high velocity is often indicative of an aggressive investment strategy. With hyperactive investors, investment decisions tend to be quick and thorough (with a clear forward motion). Generally speaking, hyperactive investors are evaluating a large number of opportunities every month, and tend to be quick and decisive about their decisions. Such investors tend to be known to provide quick decisions (without unnecessarily holding the process in a limbo).

Downward Trending

Investors that are decreasing their activity levels relative to prior quarters may or may not be great targets.
With these firms, the key consideration is around the absolute level of investment activity in recent months, as well as the slope of the decline.
Downward trending investment velocity is not grounds to disqualify or not pursue investors; it is, however, something to pay attention to.

Upward Trending

Investors that are increasing their activity levels relative to prior quarters are great targets.
These firms have just raised new capital, or have found other reasons to ramp up velocity. Irrespective of the cause, these investors tend to show healthy levels of risk appetite.
All else being equal, investors that are ramping up investment velocity tend to be likely prospective partners.

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Minimal Activity Levels

For investors that have a minimal activity level (I.e. less than “3” investments in a given year), there is no common thread as to the underlying reason. Many firms have a unique investment model whereby they invest in an extremely selective manner. Other firms have run out of capital and are simply unable to finance a large number of investments. Generally speaking, if an investor has had minimal activity in the prior year, it is worth paying close attention to their strategy. There is a high likelihood that they are looking for very specific types of investment opportunities that, in all likelihood, may not align with the user’s Company.