The two types of investors

All investors fall into one of two categories: the good ones and the ones who don’t answer founders’ emails. Let me explain.

A few days ago I introduced the founder of a startup I made a small investment in to a number of investors. First-time founder, prototype stage, pre-revenue & little traction but huge opportunity (take that with a grain of salt, as I’m biased). I made 25 introductions out of which the founder got 16 replies and 9 meetings, all in a few days. 35% success rate, which is actually pretty good. 

Out of curiosity, I had a look at the responses, to see if there’s any correlation between the performance of an investor (the quality of their investments, proven over time) and the time they take to respond to an intro. With one sole exception, the time investors took to respond to my intro email was inversely proportional with their success rate as defined above. The really, really good ones responded within 48hrs, whereas many of the less successful didn’t respond at all. This makes sense to me, for two reasons.

First of all, early-stage investing is all about having good deal-flow. The right kind of deal flow comes from accelerators, other investors, or founders. If you don’t respond to intros from other founders (or take a very long time to respond), they’ll stop making those intros. If you assume even spread between accelerators, other investors and founders, you’ve just lost 33% of your deal-flow.

Secondly, by providing timely responses to founders, the investors who get it show that they understand The Struggle. That’s a big win in a founder’s mind, because it shows they’ll be able to rely on that investor to understand what they’re going through. 

Some of my favourite investors in the world – Ondrej Bartos, Jason Goodman, Sherry Coutu, Fred Destin, Dave McClure (all of which I’ve been lucky to receive investments from) – also happen to be some of the nicest people I know. I don’t understand how so many investors don’t get this: being nice, or at the very least answering your emails, pays huge dividends.

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