We meet hundreds of teams each year and invest in only 15–20. However, clear patterns exist in the reasons why we choose not to invest in a startup. Here are the most common reasons why we pass and what we’re looking for:

1. Tech Advantage

At the earliest stages we don’t expect you to have already built world beating technology, but that should be the plan and you need the right team to do it. If your goal is to build an interface improvement or something else others can copy, that will be a blocker.

2. Equity Split

We prefer a roughly even equity split among the founders, considering most of the business still needs to be built. Even if one person had the idea or started earlier. If one founder is investing, treat that like any other investment. Heavily skewed splits usually concentrate decision-making, and the spoils, making it harder to retain the other co-founders long term.

3. Suites

Focus is a big part of startup success, so we want teams to concentrate on one feature versus several. The logic is that focusing on one narrow feature will make it hard for others to compete, potentially forcing them to rely on your technology.

Although these are our preferences, many successful businesses took a different path. If our approach is right for you, we’d love to chat: sterlingroad.com/apply