Investment Framework

The Law of 50.

Three quantitative thresholds that filter for proven, durable, capital-efficient venture-backed businesses. Every company in the Earlyasset Capital portfolio must meet all three.

See the Criteria → For Limited Partners

The Three Thresholds

Quantitative thresholds.

Each threshold tests a different dimension of business quality. A company that hits two but misses the third is not eligible for the portfolio.

CRITERION 01 — REVENUE $50M Annual Revenue Minimum

Proven Scale

$50M+ in annual revenue confirms real market demand and a business that has moved decisively past early-stage survival risk. It is the revenue floor we underwrite to.

CRITERION 02 — GROWTH 50% YoY Revenue Growth

Compounding Trajectory

50%+ year-over-year revenue growth signals continued market expansion and product-market fit. We want companies that are still accelerating, not coasting.

CRITERION 03 — MARGINS 50% Gross Margin Threshold

Sound Economics

50%+ gross margins demonstrate a business model with structural leverage. High-growth, low-margin businesses often burn cash to grow — we want companies where growth creates value.

Series B and Beyond

In addition to the Law of 50, portfolio companies must be at Series B stage or later. This ensures institutional validation and a credible path toward a liquidity event — IPO, strategic acquisition, or otherwise — that creates a clear return pathway for fund investors.

Why a Framework

Process beats opinion.

Secondary market opportunities are abundant. The hard part is filtering — most companies that look interesting on the surface fail under fundamental scrutiny. The Law of 50 is the first filter we apply to every potential position.

By committing publicly to a fixed framework, we make our underwriting transparent to LPs and counterparties. There is no "we made an exception" in our investment memos.

Transparency for LPs

LPs know precisely what kind of company will be in the portfolio. The framework is the same for every commitment, every cycle.

Discipline against fashion

Markets cycle through narratives. A consistent framework prevents capital allocation drift toward whatever sector is hottest in a given quarter.

Faster diligence

The Law of 50 is a one-page filter we can apply to any opportunity in minutes. Companies that don't meet it don't enter the diligence queue.

Common Questions

Frequently asked.

What is the Law of 50?

The Law of 50 is Earlyasset Capital's investment framework. It requires every portfolio company to meet three quantitative thresholds: at least $50M in annual recurring revenue, at least 50% year-over-year revenue growth, and at least 50% gross margins.

Why does Earlyasset Capital use the Law of 50?

The three thresholds together filter for businesses with proven scale ($50M+ revenue), durable demand (50%+ growth), and sound unit economics (50%+ gross margins). The framework is designed to eliminate companies that look promising on a single metric but lack the structural fundamentals to compound.

Do companies need to meet all three thresholds?

Yes. All three must be met for portfolio inclusion. Companies must additionally be at Series B stage or later to ensure institutional validation and a credible path to a liquidity event.

Is the Law of 50 the same as the Rule of 40?

No. The Rule of 40 is a SaaS-industry heuristic that combines growth rate and profitability margin into a single composite score. The Law of 50 is Earlyasset Capital's distinct framework with three independent thresholds — revenue scale, growth rate, and gross margin — each evaluated separately and required to be met independently.

For Limited Partners

Investing in the fund?

Learn the broader investment thesis, fund structure, and how to begin a conversation about an LP commitment.

For Limited Partners →

For Shareholders

Holding shares we'd buy?

If you own shares in a company that meets the Law of 50, we may be a direct buyer. Submit a confidential inquiry.

For Shareholders →