The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified Investor Stories 455: Lessons Learned: Building Investment Criteria, Missing HubSpot, and Staying True to Your Model (Madera, Agarwal, Bussgang)
Jan 26, 2026
Medha Agarwal, investor at Defy who backs founders across supply chain and logistics. She discusses prioritizing founders' visions over imposing investor strategy. Short takes include missing HubSpot-like opportunities, the risks of acting as a chief strategy officer, and the importance of disciplined follow-on capital.
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Stuck To Criteria To Survive A Downturn
- Meritech faced pressure to fund sponsors' struggling portfolio companies during the tech downturn and created strict criteria to avoid overextending.
- Sticking to those criteria helped them stay focused and enabled future fundraises.
Require Clear Revenue And Unit Economics
- Require meaningful revenue and improving unit economics before investing in growth-stage SaaS.
- Look for ~$10M run rate, strong growth, improving gross margins, and efficient sales teams.
Passing On HubSpot Became A Regret
- Paul Madera passed on HubSpot after comparing efficiency metrics to a prior portfolio company and later regretted missing it.
- Exceptional execution can exceed your benchmarks and make pass decisions look wrong in hindsight.