Brand equity is difficult to underwrite in growth-stage startup investments
Laela Sturdy · 20VC: Inside Google's Growth Fund & The 3 Criteria They Look For With Potential Investments with Laela Sturdy, General Partner @ CapitalG · Apr 24, 2017 · at 14:19
Laela Sturdy, General Partner at Alphabet's growth fund CapitalG, explains why growth-stage investors struggle to underwrite long-term brand equity compared to measurable growth channels.
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“We find at times in our stage of investing, it can be harder to underwrite, but it's something that we think about the company sort of continuing to build on over time. And the reason I say it's harder to underwrite at our stage is often still the channels that Companies are focused on making work are much more organic growth and driving sort of word of mouth, which is obviously a big component of brand, and then making performance marketing channels scale to drive sort of the business in the early years. And then the hope is that through those channels, you establish market leadership position and get greater brand awareness and In your core markets, and that will continue in the longer term to be a very important part of your differentiation, but typically it's harder to underwrite that with certainty at the stage that we enter a lot of our companies.”
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