Capital Cadence: Quarterly Gates That Actually Work
Technology & Software • ~7–8 min read • Updated Mar 15, 2025
Context
AI spend often follows momentum, not proof. Quarterly stage gates fix this by funding on evidence, enforcing exit criteria, and reallocating capital to the strongest signals. The outcome is fewer zombie pilots, faster scaling of what works, and a clear link between investment and value creation.
Core Framework
Structure each quarter as a repeatable investment loop with four components:
- Gate Criteria: Pre-agreed exit/continue/kill thresholds tied to metrics, data readiness, and risk posture.
- Evidence Pack: A lightweight dossier (KPIs, data quality, model performance, adoption, risks, and ROI) used in reviews.
- Decision Rights: Named owners empowered to reallocate funds within bounds; escalation paths for exceptions.
- Funding Tranches: Capital released in small increments aligned to milestones, not time elapsed.
Recommended Actions
- Define Gate Templates: Create standardized criteria by stage (explore, pilot, scale) with quantitative thresholds (e.g., ≥X% accuracy, ≤Y weeks payback).
- Stand Up Quarterly Reviews: Calendar fixed reviews (week 10–11) with a single portfolio view; decisions documented and published within 48 hours.
- Wire Reallocation Rules: Pre-authorize shifting up to a set % of budget across bets based on gate outcomes; require CFO co-sign for larger moves.
- Automate the Evidence Pack: Pull metrics from source systems to reduce manual reporting and gaming.
Common Pitfalls
- Vague thresholds that invite debate instead of decisions.
- Funding tied to calendar delivery rather than milestone proof.
- One-size-fits-all risk treatment that ignores domain differences.
Quick Win Checklist
- Publish a one-pager of gate criteria for each stage.
- Set a quarterly review date and require evidence packs 72 hours prior.
- Enable a reallocation buffer (e.g., 10–15%) controlled by named decision owners.
Closing
Quarterly gates turn AI investment into an evidence-driven machine: clear thresholds, fast reallocations, and transparent decisions. The result is higher portfolio ROI and fewer stalled initiatives.