Frankel Says Investments Must Confirm 10x Upside Potential
Founder Collective co-founder David Frankel stated that if there is no certainty of a 10x upside, he will not invest.
The team meeting requires completing the sentence "I like it because..."; if it cannot be completed, investment is not allowed. This framework emphasizes the founder's obsession or unique advantages rather than valuation.
The high threshold screening reinforces investment discipline, with early decisions under event-driven circumstances focusing more on belief, benefiting strict funds while pressuring vague transactions.
Source: Public Information
ABAB AI Insight
Frankel has long adhered to a strategy of small funds, seed stage, and ownership priority, refusing to participate in follow-on rounds; this framework continues to emphasize his focus on discipline and belief.
The "I like it because..." as a mandatory test aims to filter out transactions lacking genuine passion; similar approaches can be seen in other seed funds that insist on high-belief investments.
In contrast to the current AI boom with large, rapid decisions, we are currently in a phase where seed stage return concentration intensifies and discipline becomes more scarce.
Essentially, this belongs to capital concentration: high standard screening concentrates funds on a few highly certain projects, with the mechanism filtering noise through belief thresholds to improve portfolio quality.
ABAB News · Law of Cognition
- An incomplete sentence is a rejection signal.
- 10x is the minimum belief threshold.
- Passion precedes valuation.