Learn · Breakout Blueprint
Are you Hill Ready?
What we look for before we put a term sheet in front of an owner.
What it means to be Hill Ready
Six criteria shape whether we’re ready to offer a term sheet. None is a hard cutoff on its own; together they describe a business that has figured it out and is ready to break out.
1. Execution risk, not concept risk
Angel investors often back the person and the idea before there’s revenue, knowing most bets will fail and one or two will carry the portfolio. We take a different kind of risk. We want to see that customers want what you sell and are willing to pay for it, ideally with some recurring revenue. Typically that shows up as $500,000 to $5 million in revenue, which is why pre-revenue companies are rarely a fit for us.
2. Owner-led, with skin in the game
We’ve never invested in a business that went straight up and to the right. Every one hits a major problem at some point. Owner-operators with a lot on the line are the ones who stick through it, and when decision makers are aligned, the hard calls get made quickly.
3. Free cash flow and a path for growth
Almost none of our companies were consistently profitable when we invested; that’s usually why they were talking to us. But they were close. A business with $1 million in revenue and a $1 million loss has a long, capital-hungry road ahead, and venture capital is the better fit there. We look for companies inching toward break-even, with levers to pull if things don’t go as planned. Because Hill Note repayment is tied to cash flow, the ability to service it is built into the model.
4. Capital efficiency
We want each dollar invested to produce a meaningful, measurable return. Taking on too much capital too early dilutes ownership, adds pressure and can mask weak unit economics. Owners who know exactly how the business flows through to margins tend to make capital go further.
5. A strong economic engine
The economic engine is how a business acquires customers, delivers value and keeps them. We look closely at gross margin: at 10–20%, the engine doesn’t produce enough cash to fund growth. Because the Hill Note is paid back over time, margins have to support it. We look for businesses that compound, and for owners who can explain exactly how new capital accelerates the engine. That clarity is investable.
6. A magnetic vision
Our own magnetic vision is to invest in 500 companies and deploy at least $1 billion of growth capital by 2040. We’ve made 21 investments so far, so we have a long way to go, and that vision shapes what we do every day. We ask founders the same questions: what is your long-term vision, and what are you doing now to reach it? A strong vision attracts the right customers, employees, vendors and capital.
What Hill Ready looks like in practice
In football practice, huddling up to relay each play eats up time. GoRout’s founder, Mike, built a wearable screen and software that sends the play straight to each player, giving teams two to four times more reps per practice. Before revenue, strapping a phone to a player’s waist might have been a hard concept to back. But when we met him, teams from middle schools to Division I programs were already paying for it. That was execution risk, not concept risk.
- FEB 2020 We invest at about 130 teams, with a goal of 500
- MAR 2020 COVID arrives, and no one knows if teams will play that fall
- TODAY About 4,500 teams across football and baseball
Another example: a telemedicine provider we met in 2021, nine years into the business, looking to expand the specialist services it offers rural hospitals. The founder needed $1 million to grow sales and reach new geographies, aimed to triple revenue in three years, and wanted options for future growth or a sale. He had built the technology, owned and led the company, and had a clear path for growth. Since our investment, revenue has more than tripled, and he has far more options than the day we first talked.