I saw this post titled "How to Spot Subprime VC" from Georges van Hoegaerden on PEHUB and thought it was interesting. Here are the highlights:
- Seems more interested in how it is built rather than what the disruptive business proposition is.
- Seems more worried about cost of development than cost of greenfield customer acquisition.
- Talks about valuations before you’ve explained the value of becoming the market leader.
- Seems more occupied with categorizing the investment than understanding its unique business value.
- Talks about capital efficiency without probing market inefficiency.
- Doesn’t question market entry risk, but focuses on cost.
- Doesn’t ask about the runway to profitability, but the initial round to get in.
- Asks you which other investors you’ve spoken to.
- Asks you to talk with his associates first.
- Asks you more about your education than your work experience.
Comments