Man and girl having a small enterprise assembly in good informal garments
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One profitable angel investor has revealed two pink flags that stop him from investing in a founder within the first assembly.
Carles Reina is an angel investor who backed voice cloning AI startup Eleven Labs when it was nonetheless in its very early phases in 2022. The agency was co-founded by Mati Staniszewski and Piotr Dąbkowski, and raised $180 million at a valuation of $3.3 billion, in its Collection C funding earlier this yr.
In September, the corporate introduced it was letting staff promote shares at a $6.6 billion valuation. Reina is now a vp of income on the AI agency.
When Reina first met Eleven Lab’s co-founder Staniszewski, he informed CNBC Make It that no person wished to put money into voice AI on the time. Nonetheless, Reina determined to take an opportunity on Eleven Labs after only one assembly.
“We began speaking, and inside half-hour of the primary dialog, I informed him, ‘How a lot cash would you like?'” Reina shared.
He defined that the primary assembly is crucial when making a choice and Staniszewski displayed sure traits that attracted him as an investor.
“If the primary indicators are simply not there, I often do not need to waste anybody’s time… I feel you find yourself optimizing at all times for prime quality interactions, [it’s] such as you’re making an attempt to triage if that is one thing that you just actually like and that you just need to spend extra time with the founders or not.”
Reina opened up about two the reason why he would not need to put money into a founder after a primary assembly.
Two pink flags
One of many key traits that Reina seems to be for when assembly a founder is technicality.
“That is very private, particularly in several phases. However for me, if one of many founders just isn’t technical, like actually can not construct merchandise, just isn’t a researcher or one thing like that, I simply do not see the worth in that as a result of they don’t seem to be going to have the ability to transfer as shortly,” he mentioned within the interview.
Reina noticed this high quality in Eleven Lab’s Staniszewski, who has a first-class honors diploma in arithmetic from Imperial School London.
“It was actually fascinating to see he was eager about the issues of your complete ecosystem earlier than even truly having any product, or earlier than even truly speaking to any actual potential buyer,” he mentioned.
The second pink flag is that if the founder is making an attempt to construct an organization in a “very crowded market” which Reina typically tries to avoid.
“if there’s loads of enterprise capitalists taking a look at that market, as a result of it’s horny, I am simply not as a result of then valuations skyrocket and you find yourself going right into a pricing warfare the place everybody’s making an attempt to present them time period sheets and so forth,” he mentioned.
When too many VCs need to put money into an organization, it inflates the valuation of that firm which then places pointless stress on the founders to point out speedy development and preserve or enhance that valuation, in line with Reina.
Different causes may be that the founder is in an trade he simply is not taken with and it would not match his profile of investments.
“If somebody sends me a pitch, or I get launched to somebody that simply would not actually deliver my consideration right away, I’ll inform them right away ‘blissful that will help you on something that you just want [but] from an angel perspective or investing perspective, it is simply not one in all my issues.'”
