Oct 7, 2026 · 18 min · 7 segments
Our first investment in Margins Capital Fund 1 went to zero. This is the investment story nobody talks about. The losses. The lessons. The resilience needed to keep going. In this episode, Stephanie…
So when we decided to invest in alternatives, one thing that we had to do and, and what you're gonna have to do as well if, if you're considering making these type of investments, is put yourself in proximity to deal flow, and we did that in two ways.
One, we told everybody that would listen [laughs] that this is what our intentions were.
We were looking to make investments in growth stage venture, as well as private equity, and we basically shouted it from the rooftops and people started to hear and say, "Oh, well, maybe I have something for you." The second thing we did was we started to join networks that had deal flow.
So it could have been a general angel network as well as a more organized organization, like CapTable Coalition.
And so our first investment for fund one came from CapTable Coalition, and it was for a fintech company called Fizz.
Before we get into Fizz, I wanna remind you all of our due diligence framework, and this framework, I created it from learning from others and honed it into a structure that made sense for Margins.
W- I recommend that you start with it and then you hone it in a way that makes sense for you and how you like to evaluate deals, but I basically evaluate our due diligence framework into two buckets.
So the first thing I look at is, does this deal make sense at this price point? The second thing I look at is, can this team win? Can they do what they're trying to do? And so under the "does this deal make sense at this price point," I look at three things.
Like, does it make sense what they're trying to do? The second thing I look at is macroeconomic factors.
Does it make sense what they're trying to do in light of what's happening in the world around us and where we're headed in the next three to five years? And then the third thing I look at is, what are the unit economics of the deal? Like, can this thing make money? Then when I look at can this team win, I look at the team, like who's on the team, and are they uniquely situated to solve this problem? I then look at the competition.
Competition doesn't scare me, but I wanna know, have they thought about the competition? And I do wanna know, like, does it make sense what they're trying to do? Can this team win against the competition? Do they even have a chance? And then the third thing I look at is secret sauce.
Like, there needs to be some type of competitive advantage that gives this team an edge to accomplish what they're setting out to accomplish.
So when we decided to invest in alternatives, one thing that we had to do and, and what you're gonna have to do as well if, if you're considering making these type of investments, is put yourself in proximity to deal flow, and we did that in two ways.
One, we told everybody that would listen [laughs] that this is what our intentions were.
We were looking to make investments in growth stage venture, as well as private equity, and we basically shouted it from the rooftops and people started to hear and say, "Oh, well, maybe I have something for you." The second thing we did was we started to join networks that had deal flow.
So it could have been a general angel network as well as a more organized organization, like CapTable Coalition.
And so our first investment for fund one came from CapTable Coalition, and it was for a fintech company called Fizz.
Before we get into Fizz, I wanna remind you all of our due diligence framework, and this framework, I created it from learning from others and honed it into a structure that made sense for Margins.
W- I recommend that you start with it and then you hone it in a way that makes sense for you and how you like to evaluate deals, but I basically evaluate our due diligence framework into two buckets.
So the first thing I look at is, does this deal make sense at this price point? The second thing I look at is, can this team win? Can they do what they're trying to do? And so under the "does this deal make sense at this price point," I look at three things.
Like, does it make sense what they're trying to do? The second thing I look at is macroeconomic factors.
Does it make sense what they're trying to do in light of what's happening in the world around us and where we're headed in the next three to five years? And then the third thing I look at is, what are the unit economics of the deal? Like, can this thing make money? Then when I look at can this team win, I look at the team, like who's on the team, and are they uniquely situated to solve this problem? I then look at the competition.
Competition doesn't scare me, but I wanna know, have they thought about the competition? And I do wanna know, like, does it make sense what they're trying to do? Can this team win against the competition? Do they even have a chance? And then the third thing I look at is secret sauce.
Like, there needs to be some type of competitive advantage that gives this team an edge to accomplish what they're setting out to accomplish.
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