Nivi · September 28th, 2010
I’ve been doing a bit of blogging on a Q&A site called Quora.
Quora makes it fun and easy to write. Sometimes I ask and answer my own questions. Sometimes I answer other people’s questions. Here’s a few of my answers.
It’s always a good time to apply. You can now continuously update your application and we’ll review it every time.
Here’s how I personally filter the startups:
- If you’ve got good social proof, I’m done — I’ll make intros.
- If not, then if you’ve got great traction, I’m done — I’ll make intros.
- If not, then if you’ve got an awesome demo, I’m done — I’ll make intros.
- If not, then if you’ve got a killer team, I’m done — I’ll make intros.
- If not, no intros. Go back to work on your startup, improve one of these metrics, and apply again.
But those are just my personal filters. And my filters don’t matter much anymore. Any of the angels on AngelList can now share deals with their followers.
Social proof is when you do something because other people are doing it. If you’re walking down the street and everyone is looking up at the sky, you look up at the sky.
In this context, social proof is looking at what other investors, entrepreneurs, and advisors are doing. Customers don’t count.
I’ll disagree with Naval Ravikant on “An investor is choosing not to invest in your company and is making the introduction for you”. I don’t think this is as bad as he makes it out to be.
The primitive part of your brain will probably recoil when a peer sends you their rejects. But the logical part of your brain will ask why the investor is passing. And there’s often a good reason: wrong market, wrong stage, wrong geography, bad chemistry with entrepreneur, some known risks that the investor doesn’t want to take, etc.
Rejecting a deal just because a peer rejected it is mathematically unsound. Here’s the proof. Every deal you ever invested in was probably rejected by a peer at around the same time you made the investment. So, if your criterion is that you will reject deals that peers reject, you will never make any investments
For dealflow, check out Y Combinator and the other incubators that are popping up all over the world. Also check out AngelList.
We started with Naval and emailed the angels we knew. It spread and there are about 400 angels on the site now.