(this post is a feed post from my comments on reddit)
r/venturecapital
I was an angel investor for this one, for context i exited, did like 5 angel investments with zero experience and a lot of stupidity, then after several years and another exit i ended up working at a VC where i now am.
so i met this founded who was in the industry i used to work in (affiliate marketing) and super friendly and just a really nice guy, enthusiastic. anyways, i thought, this is gonna fail, but he still gave me advisory shares, i filed it away and forgot about it, but now 5-6 years later they are basically on their b-round. i never would have guessed, but in hindsight, it was the perfect business model for the time.
My other angle investments 2 continue to survive as decent linear growth businesses, 1 died due to the market tech shifting and their were completely blocked out; the last two were painful and stupid lessons, the biggest lesson of which was don’t fall into the hype cycle of ‘startup land’ – its not about visions of the future and make the world a better place – its all about building good product and shipping to an audience that needs it, its all about real business.
Next, now since i work at a VC, i’ve observed that its the sprinting-tortoise that tend to win, what i mean is, theres a high degree of consistency and discipline in how the founding team works, they hardly over promise, they are always setting aggressive but achievable goals based on fact, they are very good with numbers and business sense, they look very deeply at problems.
on the business side, they have high margins, they run the machine of the business with a lot of control and detail – even if they have multiple layers of staff they still have a very strong idea of whats going on at the coal face. they can articulate with detail and precision where the problems in the business are and what the 2nd and 3rd degree impacts are
their growth will be steady, but every X number of cycles you’ll suddenly realize they’ve jumped, you’ll look at the year on year and suddenly realize they 2x or 3 or more, generally they’re growing like 15-30% every month averaged out.
for me, the biggest things i look for are –
1. previous successful exit
2. high degree of understand of numbers
3. humility and leadership qualities
4. (see peter thiel/ harry stebbing criteria for evaluating the business)
on the flip – flatline growth due to no market – i personally haven’t see this if they crushed it at the pre-seed/seed – usually i see them crash and burn sooner, usually cashflow and inability to get the traction needed, not because there’s no market, but because there’s no product market fit. – but thats just from my (very) limited sample of companies.
For the pre-seed and seed investors, how early did you realize you had your first winner?
byu/Known_Impression1356 inventurecapital