

How I Judge Investors - MediaSquirrel
http://www.metamorphblog.com/2010/03/how-i-judge-investors-.html

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

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necrecious
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.

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hga
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).

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MediaSquirrel
I'm curious how others think about this process.

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hga
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.

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MediaSquirrel
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.

