Here are Ari’s Level 2 questions that dig into markets, moats, and long term value:
❓1. How big and durable is the market, and where does the company stand?
- 💥Is the market growing, stable, or at risk of disruption?
- 💥Who are the main competitors, and how are you positioned to win?
- 💥Are there regulatory, economic, or cultural trends that significantly impact the market, positively or negatively?
2. ❓Why’s this team the one to back now?
- 💥What relevant track record or domain expertise does leadership have, and what evidence shows they can execute against ambitious timelines
- 💥How do they attract, motivate, and retain top talent?
- 💥Are they demonstrating an ownership mindset (capital efficiency, free cash flow focus, personal skin in the game)?
3. ❓Is there a strong moat that will last for years?
- 💥What is the biggest threat or disruptor to your model, and how do you mitigate it?
- 💥What’s your competitive advantage, and can it become or remain a defensible moat?
- 💥If you disappeared tomorrow, what would customers do and how quickly could a competitor fill the gap?
4.❓ Can the business scale while improving quality?
- 💥Which new products, markets or partnerships are you considering, and how is your product or technology evolving to stay ahead of competitors?
- 💥Which metrics and unit economics are you tracking to ensure healthy growth?
- 💥How do you balance investment in R&D or market expansion vs. near-term profitability?
5. ❓Is the valuation a win or a warning?
- 💥What’s the valuation versus the company’s future potential?
- 💥What assumptions justify this price?
- 💥What are the current and future capital needs (equity, debt, resource allocation)?
