Sam goes over the top 8 things he has learned from investing in startups. Sam has invested in 9 startups in the last 8 years and has seen 3 exits and/or partial exits in the last six months. He'll go over the process of investing in a startup, what to look for and what to avoid as well.
Listen to ILAB 179 on iTunes here or subscribe on your favorite podcast app.
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Time Stamps:
- 06:04 – What do you look for in a start-up?
- 08:52 – Is it more important to have the management in place than what the company actually is involved in?
- 12:23 – Is international diversification important in your selection?
- 13:39 – How do you determine how much you are willing to invest?
- 14:28 – Are the Start-ups similar to how “Shark-Tank” portrays?
- 19:06 – #1: Companies take a long time to build and exit
- 22:05 – #2: Start-ups require more money, that initial investment is not the last investment.
- 26:15 – #3: Expect big dilution
- 32:52 – #4: Founder issues are common protect yourself against it
- 38:48 – #5: Cap tables becomes big issues for mediocre companies
- 45:10 – #6: Raising money is not the goal, creating value is
- 47:56 – #7: Valuation isn't important necessarily, what's more important is your entry point and exit point.
- 53:55 – #8: Nothing is a sure thing until the money is in your bank account
- 59:09 – What advice would you give to a beginner getting into a start-up?
- 63:25 – About how long is expected for the second round of investment?
- 65:16 – What should you look for in an attorney to look over the investment paperwork?
- 66:41 – What other ways can you be valuable to the company?
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