I started Groove because I kept having the same conversation. A founder with a real business, real customers and real revenue would tell me they were struggling to raise, and when I looked at the business I could see why. Not because it was weak. Because it did not look like the businesses most funds are set up to back. It was profitable, or close to it. It was not chasing a billion dollar market size. It was run by someone who knew every customer by name.
Those are exactly the businesses I want to back. Here is what I look for, in the order I look for it.
1. A founder who operates
The first thing I want to know is whether the founder runs the business or presents it. Operators know their numbers without a slide. They can tell you which customer churned last month and why. They have fired someone, lost a big account, and shipped something that failed. Presenters know the market size and the vision, and go quiet when you ask about gross margin.
I back operators. The vision matters, but a vision in the hands of someone who cannot execute is just a nice deck, and I have seen enough nice decks.
2. Revenue before the round
Groove invests from seed to Series A, but every business we back has paying customers before we write a cheque. Not pilots. Not letters of intent. Invoices that have been paid, more than once, by customers who would notice if the product disappeared.
This is not caution for its own sake. Revenue is the only proof that someone outside the founder's circle values what has been built. Everything before that point is a hypothesis, and I am not in the business of funding hypotheses. There are funds that do that well. We are not one of them.
3. Unit economics that already work
I want to see that each customer is profitable on their own, today, before any scale. Gross margin that leaves room for the cost of acquiring the next customer. A payback period measured in months rather than years. Churn low enough that growth adds rather than replaces.
If the economics only work at ten times the current size, the plan is really a bet that scale will fix a problem the founder has not solved. Sometimes it does. More often the problem scales with the business. I would rather back a business that makes money at its current size and use capital to make it bigger than back one that needs to be bigger before it makes money.
4. A path to profit that does not depend on us
The question I ask every founder is what happens if this is the last cheque. The answer I want is that the business keeps growing, more slowly, and reaches profitability on its own. The answer I do not want is that it runs out of money in eighteen months and needs the next round to survive.
That is not because I expect to be the last cheque. It is because a business that can survive without the next round negotiates the next round from strength, and so do I.
5. Sectors where I have scars
Groove backs B2B software, AI enabled services and technology led businesses in property, health, media and professional services. That is not a market thesis. It is a list of the industries where I have built and sold companies, and where I know the customers, the sales cycles, the regulators and the likely acquirers. In those sectors I can open doors on day one and tell a founder which mistakes are coming before they arrive. Outside them, I am just another cheque, and founders deserve better than that.
6. Australia and New Zealand, with bigger ambitions
We back founders based here, or selling here, who intend to go well beyond the local market. The local market is a good place to prove a model. It is rarely a large enough place to build a business worth selling to a global acquirer, and the founders who understand that from the start build differently.
What makes me say no
Most of our nos come down to a short list. A founder who wants to raise before they have charged a customer. A plan that needs three more rounds to break even. A business that depends on a single customer, channel or platform. A team that has not shipped anything in six months. A market where I would be learning alongside the founder rather than ahead of them. And, more than any of these, a founder who does not want an operator involved and just wants the money.
We say no quickly and we say why. A clear no with reasons is more useful to a founder than a slow maybe, and most of the founders we have turned down have told me so.
What a yes looks like
One conversation to understand the business. A second to agree terms. A cheque from a single balance sheet, which means no committee and no quarterly reporting theatre. After that, an operator on the phone when you need one, a network of customers, senior hires, co investors and acquirers built over four exits, and a willingness to stay patient while the business compounds.
That is the deal. If it sounds like your business, send a short note and a deck to hello@groove.com.au. Every email gets a reply.