Every emerging VC faces the same challenge:
You can’t invest in everything … so how do you choose your focus?
Well, today I’m sharing one of my favorite investment thesis frameworks – a method that can help you figure out exactly where you should be investing.
While firms like Andreessen Horowitz and Sequoia might appear to invest across the board, they actually operate with teams of specialists – experts who deeply understand specific sectors and technologies.
And as an emerging manager or new investor, you typically need to start with a focused approach of your own.
After all:
The fundamental challenge every venture investor faces is determining which markets they should focus on.
But instead of looking outward for the answer …
… they start with themselves.
Enter the Sweet Spots Framework
The Sweet Spots Framework is mind-blowingly simple, but it works.
It helps you identify markets where you’ve got natural advantages and genuine interest.
And it all starts with inventorying three pieces that make you uniquely you. Let’s break them down.
First up: Personal Background
- Where you grew up and your cultural context
- Your educational journey
- The communities that shaped you
- Your lived experiences and challenges
Next piece of the puzzle: Professional Experience
- Industries you’ve worked in
- Professional networks you’ve built
- Major industry shifts you’ve witnessed
- Organizational roles you’ve held
- Business problems you’ve solved
And last (but not least): Personal Passions
- Topics you naturally gravitate toward
- Areas where you “geek out”
- Subjects you’d research for free
- Problems you find intellectually stimulating
- Industries you follow (even when you don’t have to)
Now where does the magic happen?
When these three circles overlap. THAT is your Sweet Spot.
Let me show you what this looks like in real life.
I met an investor who grew up in Latin America around small businesses. Built a career in banking. And developed a deep passion for helping small business owners succeed.
Their sweet spot naturally emerged: SMB financial solutions for the Latin American market. See how that perfectly combines all three circles?
Everyone has a Sweet Spot. But to dig it out, it does take some work.
Map Your Journey: List your professional experiences and inventory your interests and passions. Literally write them down on paper.
Look for the Patterns: Where do your experiences overlap? What themes keep recurring? Which problems have you seen across different contexts?
Test Your Direction: Does the market you’re considering genuinely excite you? (If you’re not naturally curious about a space, it’s probably not your sweet spot.)
That authenticity is what will help you keep focused over the long haul on finding great companies, doing the hard work to figure out if they’re investable or not, and the harder work of winning a spot on the cap table.
Moving Forward
Look, this is just step one of building your investment thesis.
But it’s the foundation of everything else.
Starting with a deep personal inventory isn’t just helpful – it’s what separates the great investors from the average ones.
Next week we’re tackling the Goldilocks Principle. I’ll show you exactly how to position your market so VCs take it seriously. And no spreadsheets are required!
