Reid Hoffman: My Rule of Three for Investing
April 22, 2009
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…
Advices for getting in contact with venture capitalists
March 26, 2009
If you need to get in contact with a venture capitalist, the ENTREPRENEURS REPORT: Private Company Financing Trends – Winter 2008 lists some important advices:
Perfecting Your Pitch
As a venture capitalist, I’m constantly on the receiving end of pitches from entrepreneurs looking for capital. Over time, I’ve found that these pitches fall into three categories: (1) The Introduction, (2) The First Shot, and (3) The Full Pitch. The same mistakes regularly appear in each category—following are some of the common ones and what you can do about them.
How Do I Get Meetings with Investors?
Getting an introduction is a test of your entrepreneurial skills. If you can’t convince a middleman to make an introduction, how will you convince employees to join your company? How will you convince customers to buy from you? How will you convince investors to put their money in your pocket?
