Is it the Jockey or the Horse?

Seraf Co-Founder Christopher Mirabile interviews several experienced angel investors from around the country to ask: Is it the Jockey or the Horse? Hear from leading angels about how they place their bets and what they look for in a startup opportunity. Their investing philosophies may help guide your next diligence effort.

Video Transcript

C. Mirabile: Is it the jockey or the horse? [00:00:08]

F. Peters: I love that question! Always the jockey, right. Now you hear from Kleiner Perkins - Tom Perkins - he was big on the horse. But of course he basically ran HP. He had unlimited resources, so if you've got unlimited resources, the horse is going to appeal to you. But for the rest of us, it's clearly the jockey. [00:00:13]

N. Ravikant: I know there's a lot of belief out there that it's the horse, but I still just like to bet on jockeys. [00:00:35]

R. Sheridan: I think it's always the jockey because you can have a good horse and the jockey will run the difference. [00:00:41]

J. Caruso: It's the jockey 99% of the time. If you have a patent or a cure for cancer you can be a bit of a jerk. [00:00:48]

D. Berkus: I believe very strongly it's the jockey. You can change the horse, and in fact we do. We change the horse in almost every single deal we see and some of the greatest examples led to some of the biggest profits after the horse was modified, not necessarily changed out. So I believe in jockeys. [00:00:57]

D. McClure: Well, it's always the jockey but when you're making that first bet you don't know how good the jockey is. So, I think it's a little bit of both. [00:01:14]

J. Hammond: Oh, it's both. You know, the jockey is awfully important. If the person can't think their way out of the box and make the change, made a fairly high rate of change across the company happen across the company, then it's not a good angel investment. VCs can invest in a concept and swap out the management. But, even though I've helped change out management a couple times in companies, it's really a lot harder if there's not a jockey and horse that you can believe in. It's really not good angel territory. [00:01:24]

J. Huston: Yes. And I say that because, candidly, I've frequently lost money because the jockey was so good and I wasn't smart enough to understand that they were riding a burro. I just didn't know the competition as well. Conversely, of course, the horse is important, as is the jockey. [00:02:02]

B. Peters: You know, the jockey-horse thing I have had many hundreds of enjoyable hours debating that in individual situations, and I have seen both. I've seen things where there was a brilliant idea which might have been an accident, and an avergae team that made a fabulous return. I've also seen brilliant entrepreneurs who had two or three bad ideas in a row but made the third or fourth one work. So I think there are some that are both which is why I think we'll continue to have the question about jockey or the horse forever. [00:02:29]