Altos Ventures

Altos Ventures manages money for institutional investors, most of them with charitable, educational or non-profit missions, and the firm presents that responsibility as the reason it takes a long view. It puts initial money into early-stage companies working on emerging consumer and enterprise opportunities, and its site shows a portfolio that includes hotels and retreats as well as software.

Investing for endowments and foundations

The firm describes itself as privileged to manage money for organizations whose purpose is charitable or educational, and it says it looks for founders who share a strong sense of purpose. Serving entrepreneurs is described as a calling rather than a transaction.

Five habits that shape its choices

Altos sets out its approach under five headings. Being purpose driven is the first. Being founder oriented is the second: it argues that the best-known companies were built and run by founders, and it prefers management with an ownership mentality and a vision for all stakeholders as well as for the bottom line. Third comes a focus on fundamentals, meaning strong operating discipline and attractive unit economics. Fourth is patience: the firm says it is known for it, and that it can commit significant further capital to high-performing companies more than ten years after its first investment. Last is a contrarian streak. Altos says it avoids chasing trends or hot sectors, evaluates each team, company and market from first principles, and steers clear of overfunded areas in favor of companies taking unusual approaches to large problems.

Foxes, hedgehogs and the founders it prefers

The firm publishes an essay built on the old contrast between the fox, who knows many things, and the hedgehog, who knows one big thing. Borrowing the framing from a well-known management book, it observes that serial entrepreneurs tend to behave like foxes, quick and clever, while the people who stay at one company for decades tend to behave like hedgehogs. The tone is deliberately a little tongue in cheek, but the point is serious: the firm says it has been an investor in some of its companies for over ten years, and it hopes some of its founders are true hedgehogs who are only getting started. It also adds that it means the label as a compliment, since becoming a real hedgehog is hard.

Who it backs

Its site presents the portfolio as company cards. Two names appear in the material, a restaurant reservation business operating as Catch Table and a group of hotels and retreats, which gives a sense of how broad the consumer interest is.

Altos Ventures is a venture capital firm that invests on behalf of institutional investors, most of which have charitable, educational or non-profit missions. It describes serving entrepreneurs as a calling.

What Altos Ventures offers

• Early-stage investment: first cheques go to young companies tackling emerging consumer and enterprise opportunities.
• Long-term partnership: the firm says it can commit further capital to strong companies more than a decade after its first investment.
• Operating focus: it looks for management teams with an ownership mentality and sound unit economics.

Customers and markets

Altos prefers founder-led businesses and avoids overfunded areas. It says it does not chase trends, and it judges each team, company and market on its own merits. Its portfolio includes Catch Table.

Key facts

• Stage: early-stage, with a patient approach
• Sectors: consumer and enterprise