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 levels 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 Sequence C funding earlier this yr.
In September, the corporate introduced it was letting workers promote shares at a $6.6 billion valuation. Reina is now a vice chairman of income on the AI agency.
When Reina first met Eleven Lab’s co-founder Staniszewski, he informed CNBC Make It that no one needed to spend money on 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 normally do not need to waste anybody’s time… I believe you find yourself optimizing all the time for top of the range interactions, [it’s] such as you’re attempting to triage if that is one thing that you simply actually like and that you simply need to spend extra time with the founders or not.”
Reina opened up about two the reason why he would not need to spend money on a founder after a primary assembly.
Two pink flags
One of many key traits that Reina appears to be like for when assembly a founder is technicality.
“That is very private, particularly in several levels. However for me, if one of many founders just isn’t technical, like actually can’t 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 attention-grabbing to see he was serious about the issues of your entire 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 attempting to construct an organization in a “very crowded market” which Reina typically tries to keep away from.
“if there may be a variety 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 conflict the place everybody’s attempting to provide them time period sheets and so forth,” he mentioned.
When too many VCs need to spend money on an organization, it inflates the valuation of that firm which then places pointless strain on the founders to point out fast progress and keep or enhance that valuation, in keeping with Reina.
Different causes could be that the founder is in an trade he simply is not excited by 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 convey my consideration right away, I’ll inform them right away ‘blissful that will help you on something that you simply want [but] from an angel perspective or investing perspective, it is simply not one among my issues.'”
