Chamath Palihapitiya of Social Capital gives 4 things founders should look for in their investors.

TL;DR

Picking a good investor involves assessing their portfolio quality, ability to secure follow-on financing, alignment with your values, and access to operational help.

Transcript

here's what I've realized about picking a good investor there are I think four things that matter and you should do your own diligence because these things are critical especially when times are tough the first is are they good pickers and there is now exceptional data from places like CBN sites in matter mark where they will go and literally rank ... Read More

Key Insights

• 🧑‍🏭 Portfolio quality is a critical factor in selecting an investor, as it determines the environment and learning opportunities for companies within the portfolio.
• 💗 The ability of a venture capitalist's portfolio to secure follow-on financing indicates their support in scaling and growing companies.
• 🍉 Choosing an investor who aligns with personal values and beliefs is essential for long-term mutual success.
• ✳️ Operational help from an investor can significantly contribute to a company's growth and reduce the risk of resource depletion.
• 👣 CB Insights and Mattermark provide valuable data for assessing portfolio quality and follow-on financing track record.
• 🏆 Surrounding yourself with winners can increase the chances of success in the startup ecosystem.
• ⌛ Access to the benefit of the doubt from other investors is crucial during challenging times and can be gained by making enough successful investments.

Questions & Answers

Q: How does portfolio quality affect the selection of an investor?

Portfolio quality is essential as it influences success and enables learning from exceptional leaders within the portfolio. Being part of a group of winners increases the chances of success in the long run.

Q: Why is securing follow-on financing important in selecting an investor?

Follow-on financing indicates an investor's ability to continue supporting a company's growth and securing future funding rounds. It is crucial to choose an investor with a track record of strong follow-on financing performance.

Q: Why is alignment with values and beliefs important when selecting an investor?

Aligning with an investor's values and beliefs ensures a cohesive working relationship and avoids conflicts. Success is more likely when both parties share a common perspective on how society and life should work.

Q: How does access to operational help factor into selecting an investor?

Having an investor who provides operational guidance and assistance is valuable. It helps navigate challenges, reduces the risk of running out of resources, and increases the investor's credibility with other potential investors.

Summary & Key Takeaways

• Portfolio quality is crucial in selecting an investor as it determines the success of the companies within that portfolio and provides opportunities for learning from exceptional leaders.

• The percentage of follow-on financing obtained by a venture capitalist's portfolio indicates their ability to support companies through different funding stages.

• Choosing an investor who aligns with your values and beliefs is important to avoid conflicts and ensure mutual success.