Dive Brief:

• New York-based ed tech investment firm Rethink Education is the subject of a new EdSurge profile that seeks to identify how fledgling investors can find creative ed tech projects that will also bring home the bacon.  
• According to Matt Greenfield, a partner with the firm, the key to successful and lucrative investments is hedging your bets with "pioneers," not people trying to perfect something that's already been created.  
• Greenfield shares his three tenets for a successful investment: Pick companies that can be "first sellers", work with companies that are authentic, and pay attention to the math when investing.   

Dive Insight:

According to EdSurge, proof of Rethink Education's success is the fact that gains from three of their 16 investments equal the entire amount raised to start their fund: $60 million. And rumor has it the firm is considering another round of funding in order to take more innovative tech companies under its wings. “There are a lot of great companies that I’d be happy to invest in, if I had less deal flow,” Greenfield told EdSurge.  

So what are the lessons we can take away from Greenfield? For one, he brings up the "First Seller" advantage —​ the idea that once schools pick a product they are probably going to stick with it for a while because they want to see it out, but also because they may not have the funds to pick something totally new. This is where the pioneer idea comes in Schools are going to stick with what they have, so if you want to make it into the classroom, you have to pitch something that isn't already there. Gaining the "First Seller" advantage means revenue will be steady once a product is picked by a district. Greenfield's second lesson is staying "real." Schools care about a company's attitude and are looking for a "partner" more than just a seller-customer relationship. Greenfield's last lesson for investment is to pay attention to the numbers. A company that can be acquired by a larger organization is ideal.