I love picking the brains of other investors, especially in stages, sectors, and geographies outside my own.
Even more so while I’m visiting Tel Aviv, Israel (AKA Start-Up Nation) for 2 months! 🇮🇱
The majority of my favorite, and most powerful, insights are gathered through many of these 1:1 discussions.
Each investor I interact with has their own unique way of evaluating businesses and founders, and their own informed vision of the future.
👉 Here is one of my favorite nuggets from this week:
Investors see funding rounds as removing layers of risk within the business.
So…
✨ It is critical to identify businesses where the biggest risks are front loaded… and the founders who know how to manage these big risks early on in the business. ✨
What does that mean?
The biggest risk, to an early-stage investor, is often whether or not the product will be adopted and generate revenue.
There is a preference for businesses with *some* sort of commercial inflection point early on (within 3-6 months) in the stage of funding (typically 18-24 months in duration).
Finding a way to hack early traction (even before a product is developed) gives plenty of time for founders to iterate and to gather proof of market demand for subsequent investors.
Now… back to meeting with the many talented founders and investors here in Israel. 🙂
