Carwow and the Episode 1 Pre-Mortem

Here at Episode 1, we loved Daniel Kahneman’s Thinking, Fast and Slow.
It is full of wonderful anecdotes, acerbic wit and invaluable insights for investors and others, in all walks of life. We try to avoid fast thinking as we evaluate opportunities and try to combat our all too human tendency to group think as we get closer to investment.
One small section of the book, in particular, has influenced the way that we interact with our investee companies, especially in the days immediately before and after investment.
The Pre-mortem.
Most investors will be interested in how long money lasts and establishing a 100 day plan to ensure that the period immediately post-investment is not lost in an organisational sigh of relief that cash is no longer “too tight to mention”. We agree, but we like to take that sort of thinking a little further.
So, before we invest, we agree with our entrepreneurs what the business needs to achieve within the 12 – 18 month period for which we have provided funding. While there are exceptions, for most companies in which we invest that means being clear about what we need to have proved when the company hits the funding trail again. This varies from business to business. It might be hitting KPI’s around conversion, or customer acquisition costs, replicating initial success in one vertical in a second vertical. Whatever the KPI’s, they are centred on demonstrating to the Series A and B investor community that our company is focused on a market of real scale, that the market loves what the business is doing and that the team is capable of executing and delivering very strong results. In short, the message to the new investors is this: if you give us the capital, we will utilise that capital profitably and effectively and we will grow a significant business.
In the days after investment, we throw a metaphorical bucket of ice-cold pessimism all over the Board and invite the team to conduct a Pre-Mortem. Lets forward-wind 18 months. Lets imagine that we are looking at a situation where we have not been able to raise that new round of capital and that we are therefore looking at a failure. What do we as a group think will have happened, or what will we have failed to do successfully that leads to that dreadful day. What are the internal threats to that success, how might the various market participants react to what we are doing, what are the vulnerabilities around what we are doing.
This exercise generally yields 5-6 mission critical outcomes that we need to avoid in that first period post investment. As a Board, we then monitor each of these threats to the business and think deeply about how our strategy or changes to our market approach might mitigate or exacerbate these risks.
The first time we went through this exercise was with James Hind, Founder of the new-car buying site, Carwow.
Together with James, his co-founder Alex Margolis and David Santoro, Carwow’s CTO, we identified the key risks facing the business over the first 12 months post investment. This informed all the major strategic decisions that James and his team made over the intervening period and when Carwow raised a new round of funding in February this year, we repeated the exercise with the new investors.
We have continued to find this working well as we start to build our portfolio of investments. It will not prevent us making mistakes, but we hope it helps to keep our entrepreneurs focused on the long game and the big themes as they take decisions on a day to day basis.


Our newsletter is only for the people that want to be seen. If you want to get all the latest tips, tricks, news and updates from Episode 1 then this is the newsletter to be subscribed to. See you in your inbox.

* indicates required

Marketing Permissions

Episode 1 will use the information you provide on this form to be in touch with you and to provide updates and marketing. Please confirm you are happy for us to contact you by email:

You can change your mind at any time by clicking the unsubscribe link in the footer of any email you receive from us, or by contacting us at We will treat your information with respect. For more information about our privacy practices please visit our website. By clicking below, you agree that we may process your information in accordance with these terms.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.


    0 / 1100 characters

      Are you raising £2million or less?


      Sorry we only invest in this stage, so please do not send us a deck if you do not meet this requirement.

      Are you a UK based business?


      Sorry, we only invest in UK business, please do not send us a deck if you're outside the UK.

      Are you B2B focused?


      Sorry, we only invest in B2B focused businesses, please do not send us a deck if this isn't you.

      Are you software focused?


      We only invest in software driven startups, please do not send us a deck if this is not you.

      Please send your pitch deck (max 10mb) to and we'll come back to you!
      We appreciate your interest in working with us.


      Contact us

      Our address

      4th floor, 112-116 New Oxford St, London WC1A 1HH