How to become a billionaire – leaked DST document reveals secrets of Yuri Milner’s colossal internet success2012-03-15 11
The DST investment criteria – the secret to securing funding
It won’t be any surprise that the document reassures investors that DST focuses on “high-growth companies led by visionary entrepreneurs”; category leaders that are already profitable or soon will be, with strong leadership: “Historically, high-growth companies have gone public too early: our strategy enables the board/management to postpone IPO allowing them to focus on growing the company and maximizing long-term value”.
DST will wait until a company ticks all these boxes before it will invest – to date, 250 potential companies were reviewed, which were gradually whittled down by Due Diligence reports to the final lucky 11 so far.
The most popular reason for non-investment was scalability (at 42%), followed by concerns over not being a category leader (26%), concerns over the management team (16%) and concerns over profitability (16%).
The Twitter principle
It means that DST will potentially follow and monitor a number of interesting companies and wait for them to meet the full criteria before investing – explaining its relatively late arrival to the Twitter party – despite being valued at $3.7bn and with 300 million users, there was still no solid path to monetisation.