What I look for in Startups by Jeff Pulver

Wow, Jeff is spot on here. Straight to the heart of the matter.

April 29, 2008
What I look for in Startups

During the past ten years, what I look for in a startup has changed.

These days I no longer actively look for an opportunity to participate in the “A” round or “B” round of a startup, although I still do that from time to time. My recent investments in both Seesmic and twitter are a reflection of this.

During the past couple of years, my core focus has shifted from making investments in companies and their mission to making investments in people and their vision. And I focus on what I consider “early-early stage” opportunities.

These days when I’m making a decision about a startup opportunity to invest in, I put the people first, I consider their vision and then weigh-in on my take on their ability to be a disruptive force in their chosen market space. As someone who believe that we are living in an industrial revolution that our parents and grandparents never experienced, I’m looking for people (and teams) who look to leverage “the Internet” and are building software/application/services that do something different and something that wasn’t either practical or possible to do before. Having the vision is one thing, but vision without market timing is a recipe for failure. That said, some of the most interesting companies I’ve met with were with people who were early in one market segment and were inspired to use their experiences to morph themselves into something else.

I make it a point to get to know the people I’m investing in and once an investment is made, I make myself available to help whenever asked. It just happens that the majority of my recent investments turn out to be early-stage Israeli Hi-Tech Startups.

While sitting in the lobby of a hotel and having 16 back-to-back meetings may be a long day for some people, it is something I especially look forward to doing whenever I visit Israel. I enjoy being consumed by an energy that is just present when I’m in Tel Aviv. While I have met with startups in many places around the world, there is just something special I feel whenever I’m meeting with early-early stage Israeli startups.

When meeting with an early-stage startup looking for funding, if I am interested in the company, I look to connect with the founders and find out the inspiration behind the company they are creating. I try to understand the problem they are solving and the opportunity they are seeing. I also look to see how as a team they get along, work off each other and I try to get a feel of their creative energies. I look for teams where each member is watching each other’s back and a core team whom I feel will be together for the long term. I look for people who are both smart and creative who can be focused when necessary and whose personality allow themselves to be open to change directions and re-map themselves when needed. I invest in people first and ideas second. I am not a fan of structure but I appreciate the need for it…sometimes.

I will be back in Tel Aviv the week of May 19th and I am looking forward to meeting with early-stage Hi-Tech startups. If you know of someone who I should be meeting with, please feel free to contact me.

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