3 ms·

How I Judge Investors

46 points by MediaSquirrel 17y ago

MediaSquirrel 17y ago
I'm curious how others think about this process.
- hga 17y ago
  Seems good to me, I can't see anything to argue with and several of his showstoppers are indeed really important. And his general point on getting good investors is really important; as a senior developer in a number of startups I've experienced a few were a bad investor destroyed the company. I would say that in most cases it's really better to never get such an investment at all, even if you fail, than to have that happen. Final comment: it's not clear to me that most (or even many) entrepreneurs will have enough life experience like this guy does to be able to both make the right character judgments and then to act upon them. Desperation will do funny thing to people. But if you can, you'd be well advised to do as much of what he advises as you can.
  - MediaSquirrel 17y ago
    I am that guy, just fyi. I am 29 years old and this is my first company. Honestly, I was just curious if this is how others approach the problem. My father has a saying in spanish that roughly translates to "Each man's mind is an island." As a newbie, I'm curious how others brains work when they approach this problem.
wrs 17y ago
These criteria shouldn't be limited to investors. I would have titled this "How I Judge Everybody"!
- necrecious 17y ago
  I think this is how VCs select startups as well. They are investing in the people. That's why Loudcloud can get $45mil valuation after 2 months from founding and anyone else with the same idea would get laughed out of the building.
  - hga 17y ago
    One thing I've noticed about a lot of the really successful first stage VC fundings: the deal was done quickly. If a VC is dragging out a deal more than say a couple of months, something somewhere is wrong. Caveat: if you're doing something radically new, the time it takes to sell the concept vs. work out the deal probably doesn't count. Wildly successful very fast funding examples that I can think of like Apple and Sun didn't have to sell their concepts (much; first really consumer friendly PC long after the concept had seized the imagination, the disruptive technology of the engineering workstation in an era where computer power was very dear and very centralized).

46 points by MediaSquirrel 17y ago

MediaSquirrel 17y ago

I'm curious how others think about this process.

hga 17y ago
Seems good to me, I can't see anything to argue with and several of his showstoppers are indeed really important. And his general point on getting good investors is really important; as a senior developer in a number of startups I've experienced a few were a bad investor destroyed the company. I would say that in most cases it's really better to never get such an investment at all, even if you fail, than to have that happen. Final comment: it's not clear to me that most (or even many) entrepreneurs will have enough life experience like this guy does to be able to both make the right character judgments and then to act upon them. Desperation will do funny thing to people. But if you can, you'd be well advised to do as much of what he advises as you can.
- MediaSquirrel 17y ago
  I am that guy, just fyi. I am 29 years old and this is my first company. Honestly, I was just curious if this is how others approach the problem. My father has a saying in spanish that roughly translates to "Each man's mind is an island." As a newbie, I'm curious how others brains work when they approach this problem.

wrs 17y ago

These criteria shouldn't be limited to investors. I would have titled this "How I Judge Everybody"!

necrecious 17y ago
I think this is how VCs select startups as well. They are investing in the people. That's why Loudcloud can get $45mil valuation after 2 months from founding and anyone else with the same idea would get laughed out of the building.
- hga 17y ago
  One thing I've noticed about a lot of the really successful first stage VC fundings: the deal was done quickly. If a VC is dragging out a deal more than say a couple of months, something somewhere is wrong. Caveat: if you're doing something radically new, the time it takes to sell the concept vs. work out the deal probably doesn't count. Wildly successful very fast funding examples that I can think of like Apple and Sun didn't have to sell their concepts (much; first really consumer friendly PC long after the concept had seized the imagination, the disruptive technology of the engineering workstation in an era where computer power was very dear and very centralized).