As an investor, my goal is to find companies that can differentiate themselves strategically to drive sustainable growth. That focus may seem self-evident, but it had to be learned.

Executive Summary

Mark Watson, who once co-founded a VC fund and now serves as CEO of global insurer Argo Group, reveals that investing has an instinctive component. Still, his gut instincts are supported by patterns of organizational health that are common among successful companies. Here, Watson shares seven clues that guide his investment decisions.

In particular, I’ve had to break it into discrete categories of investigation that ultimately influence my decision to invest or not. The topics include all the typical elements of a business plan: line of business, stage of development, size and maturity of the market, product roll-out, operational and marketing plans, quality and experience of the management team, intended use of the funds, and cash-flow projections.

But I learned early on that, beyond clinical assessment, investing has an instinctive component. I began to get gut feelings about a company based on patterns and clues I uncovered in my research. Importantly, I began to be able to see what a company might do differently to make its plan work, particularly as a part of Argo.

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