Reid Hoffman: My Rule of Three for Investing

Reid Hoffman, the founder of LinkedIn, describes his first three criteria to evaluate the business idea of a startup:

As a serial investor, I’ve enjoyed backing some good Web 2.0 companies, and it’s helped me develop a shortlist of criteria to cut the wheat from the chaff. After five minutes of a pitch, I know if I’m not going to invest, and after 30 minutes to an hour, I generally know if I will. Many entrepreneurs are product-focused, which leads them to pitch the brilliance of the product. Others are money-minded, so they can over think the business plan. But neither of these approaches answer the first few questions I want to know as an investor:

1. How will you reach a massive audience?

2. What is your unique value proposition?

3. Will your business be capital efficient?

Read the whole story at TechCrunch…