RedDot acts as an early investor, typically providing the company’s first or second outside capital. We invest in and accelerates potentially scalable start-up businesses – focusing on those with proprietary intellectual property and technologies, potentially large markets, strong management teams, a well-developed business model and sustainable competitive advantage.
In brief, the qualities of the companies that RedDot will invest in are/have:
- Disruptive technologies in high-growth markets
- Pre-Seed, Seed & early stage high tech startups
- Significant operations in Singapore with global or regional target markets
Furthermore, RedDot will evaluate each of these investments on specific criteria and ask management teams the following questions:
- Scalable Product with sustainable differentiation
- Can you deliver significant differentiation in your niche market? IP?
- Can you evolve your product to compete in the mainstream market?
- Scalable Market with sustainable profitability
- Is the targeted customers segment profitable?
- Is the addressable market large enough to build scalable business?
- Management Scalability
- Can leadership execute on the business plan (1-3 years)?
- Is the leadership committed to the cause and do they have skin in the game?
- Financial Scalability
- Is there a reasonable chance of achieving the various milestone needed to support series A funding?
- Is target level of financial return appropriate given the risk profile for the investment?
Beyond investing in seed stage startups from the private sector with an existing management team, RedDot also works with various research institutes to invest in potential spinoffs and can even assemble a management team to license promising intellectual property to create a new spinoff. Our target is to have one-third of our investments based on technologies developed in research institutes.