“What we have seen over and over again – and we can’t stand it – is the failure of great ideas to make the leap to great businesses. Visionary founders need both capital and good advice – and unfortunately, often get too little of each. It drives us crazy and it’s why our purpose is
To Transform Great Ideas Into Revolutionary Businesses.
David Scalzo, Founder of Kirenaga Partners
We invest in early-stage venture companies that have developed products and are on the verge of initial commercialization, at the stage we call “Post-Technical Validation and Pre-Commercialization.” Our investment partnership is in high-demand from Visionary Founders for three reasons:
(1) We write the missing check. It is our observation that the $2 million investment check is the hardest to find, as it is often too large for personal and angel networks, and too small for the largest institutions. We solve this funding gap and invest enough so our founders can focus on growing their business, rather than wasting time with piecemeal capital conversations.
(2) We lead. We will invest with conviction and are willing to be the first professional capital partners. We are comfortable setting valuation and investment terms, and will seek to catalyze other investors.
(3) We level the playing field. We consider ideas regardless of who or where they come from. We are business builders first and foremost, and we bring our expertise and national network together to partner with our founders to build companies with enduring value.
We run a disciplined investment process and say ‘no’ to most ideas. We look for two things: (1) talented founding teams looking for true partnership, rather than just capital, and (2) the opportunity to make a “Ten-by-Five” investment return, or a 10x return in five-years or less.
A 10×5 Idea will be:
MEANINGFUL: the relevant market size is large and positively impacts a large population
IMPACTFUL: the investable idea is a true industry breakthrough and will generate substantial gross margins
READY: the technology is post-validation, defensible and approaching commercialization
ATTRACTIVE: the entry valuation is appropriate
Our first and most important belief was agreed upon at the founding of our firm and is represented in our name, Kirenaga. It is the core of who we are. We understand that no matter how much we know, there is much more to learn. We are humble in our abilities and are always open-minded to new and better possibilities. We quickly acknowledge obstacles and work relentlessly to turn those setbacks into new sources of strength. We embrace change and are constantly willing to re-invent ourselves and our firm as time progresses and the technology, business and financial world evolves.
We aspire to be friendly and networked with wide groups of investors, entrepreneurs and advisors. We believe that good luck happens when you have the right intentions, are actively engaged in the world, and constantly seek new relationships. We are not secretive and do not hide in fortified offices. Instead, we embrace the possibility of serendipitous meetings that can occur anywhere and at any time as long as you are constantly looking.
At Kirenaga, we fully embrace the philosophy that Fortune Favors the Bold. We are willing to look for opportunities where others do not. We are ready to act before others see potential. We stay away from club deals when the opportunity doesn’t fit, even when there is pressure to be involved. We believe that differentiated, above-market returns come from investing boldly, and often at times and in places where others will not.
Create Enduring Value
We seek to build companies that last. We are not out to make a quick return by searching for mispriced assets, speculating and flipping. Rather, we seek to create Enduring Value for our companies so that these companies are attractive to the next set of investors and we can exit smoothly. We believe creating Enduring Value provides the greatest possible return for our portfolio companies, for our investors and for the world-at-large.
Kirenaga is a Japanese term used to describe a knife or sword blade. It literally translates to “duration of sharpness” or “amount of edge retention“.
We were drawn to the term Kirenaga because it represents the principles we aspire to embody as a company – to find and maintain a distinctive edge in everything we do. It takes a commitment to excellence and great craftsmanship to balance the metallic properties of hardness and toughness to create a blade with high “Kirenaga.”
Additionally, Mt. Kenya, the second-highest peak in Africa after Kilimanjaro, was originally known as Mt. Kirinyaga. Anyone viewing the great Mt. Kirinyaga will likely see the same characteristics we desire to build in all our portfolio companies – substantial, enduring, and inspiring.