Interesting article, although I’m not sure I agree with the ‘no brainer’ part.
While “Nothing kills deals like more time and more data” is certainly true, it’s also not necessarily a bad thing. Because there’s already a long list of investment frauds and managed failures where the only people making bank were the founder(s), all made possible because investors had such ‘no brainer’ moments and forewent all due diligence based on the supposed “investable-ness” of the founders. When it turned out that their “specialness” was really just their ability to sell their investors down a river. And those aren’t exactly rare occurrences in the world of Venture Capital.
To me as founder, frankly any investor willing to invest solely based on my personality and irrespective of the merits of my actual ideas/business would raise a huge red flag and very likely would make me walk away. I do want to see my ideas and my concepts to undergo at least some scrutiny, because it shows me that the person who might become my new business partner is taking this seriously, and at least tries to understand the details of the business they might soon own a share of. It also shows me whether this prospective business partner truly understands my sectors (DeepTech/DefTech/Aerospace) and the specific challenges it poses to startups like mine (it’s absolutely staggering how many don’t).
At the end of the day, accepting an investment isn’t just taking a check, it’s most of all entering a long-term business relationship with someone who’ll own a share of my business (the check is merely the facilitator). Both sides have to be confident they can work together productively, and that’s not possible without at least some level of scrutiny from both sides (I wouldn't enter into a deal without scrutinizing the prospective partner) . Without this, it’s really just a waste of everyone’s time.
Interesting article, although I’m not sure I agree with the ‘no brainer’ part.
While “Nothing kills deals like more time and more data” is certainly true, it’s also not necessarily a bad thing. Because there’s already a long list of investment frauds and managed failures where the only people making bank were the founder(s), all made possible because investors had such ‘no brainer’ moments and forewent all due diligence based on the supposed “investable-ness” of the founders. When it turned out that their “specialness” was really just their ability to sell their investors down a river. And those aren’t exactly rare occurrences in the world of Venture Capital.
To me as founder, frankly any investor willing to invest solely based on my personality and irrespective of the merits of my actual ideas/business would raise a huge red flag and very likely would make me walk away. I do want to see my ideas and my concepts to undergo at least some scrutiny, because it shows me that the person who might become my new business partner is taking this seriously, and at least tries to understand the details of the business they might soon own a share of. It also shows me whether this prospective business partner truly understands my sectors (DeepTech/DefTech/Aerospace) and the specific challenges it poses to startups like mine (it’s absolutely staggering how many don’t).
At the end of the day, accepting an investment isn’t just taking a check, it’s most of all entering a long-term business relationship with someone who’ll own a share of my business (the check is merely the facilitator). Both sides have to be confident they can work together productively, and that’s not possible without at least some level of scrutiny from both sides (I wouldn't enter into a deal without scrutinizing the prospective partner) . Without this, it’s really just a waste of everyone’s time.