Fund The Founder Or The Prototype, But Not The Idea

Written by Paul on September 3rd, 2012

When you invest in a company, you’re choosing to back the founder, the idea or the prototype. Or some combination of those. It seems to me that the only reasonable choices are to back the founder or the prototype, but not the idea.

Either back the founding team and be very clear about it (eg, like YC funding founders without ideas) or back a prototype with some sort of small but meaningful traction. Anything between those two extremes is unnecessarily adding risk to what is, by definition, already very risky.

Enjoy that post?

Subscribe via the RSS feed or email updates and get the latest posts without checking the site.

Want to think like an investor?

Leave a Comment or a Question

Explore Results Junkies