What Kinds of Investment Situations Do You Steer Away From?

Seraf Co-Founder Christopher Mirabile interviews several experienced angel investors from around the country to ask: "What kind of investment situations do you steer away from?"

Learn what these influential angels have to say about finding great investment opportunities and avoiding bad ones. These best practices will help guide your next due diligence process.


Video Transcript

C. Mirabile: What kinds of investment situations do you steer away from? [00:00:04]

M. Heymann: Teams that don't work well together. [00:00:08]

J. Hammond: Investments where there is a husband-wife or really close relationship between the founders is sometimes difficult. [00:00:12]

J. Caruso: Ones where I don't trust the entrepreneur, if I am being oversold, or if I hear too many inconsistencies. [00:00:21]

N. Ravikant: Generally I'll steer away from when people are just trying to maximize valuation or maximize heat around the deal. But also time is very limited so I only invest in things where I have an affinity for the product and for the entrepreneur. [00:00:30]  

R. Sheridan: Situations where the ego of the entrepreneur is too big. Situations where they don't have a good sense of how to position themselves in the market and want to be all things to all people. I'm really looking for something that has a defensible niche. [00:00:45]

D. McClure: We don't invest a lot of ideas, we invest in prototypes that have some functional use. So a lot of times big ideas are great but I'd rather wait to see if there's about 5 or 10 customers first. [00:01:02]

F. Peters: Lately I've been talking a lot about retail models where you're going to do something in one city and then perfect it and then go to another city to do it. I don't like those models. [00:01:15]

D. Berkus: I don't like retail in any way because of inventory. And I don't like any kind of content because content is so amorphous and so risky. [00:01:25]

B. Peters: I think the kinds of investments that I steer away from are two types. One of them is that when I come in I see that the cap table and the whole structure is already messed up to the point where it's going to be an enormous amount of work to fix it and a lot of times what I'm finding is that I'll just walk away from most of those types of investments. [00:01:36]