The Jeff Pulver Blog: What I look for in Startups

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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.

Tags: Tel Aviv, startup, Israel, Jeff Pulver

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Posted by jeff on April 29, 2008 10:06 AM | Permalink

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Posted by: 情趣用品 at May 16, 2009 08:51 AM

As in most fields in life, the people we spend our time with are an extremely important part of our experience.

Posted by: Amir at May 6, 2008 07:36 PM

Arrigton writes the same about Israeli investor Yossi Vardi - he invests in people.
Looking from the other side (I am a developer, not investor) it seems a bit strange to me. I guess it is a wise strategy - I invest in people when hiring or when befrending - and my time is as valuable to me as money to an investor. But I did not see much that "person" based strategy being spelled out like that. I guess it is done subconsiously most of the time.

Posted by: Michael Kariv at May 4, 2008 04:08 PM

Knowing you a little, this post is really not surprising, but still both interesting and encouraging. I recently listened to "Angel Investing Revealed - Ron Conway, Mike Maples Jr. (Angel Investors)" talk on "Stanford Technology Ventures Program" which was pretty depressing for an Israeli entrepreneur (especially minute 35:15 and on when they speak about starting a company outside the silicon valley). I am happy that you feel different.

Posted by: Mike at April 30, 2008 10:06 AM

jeff - it's interesting that you note this particularly with israeli early-early startups (as opposed to american, european, etc) - perhaps this is a cultural difference (and not actually representative of significant energy differences). as a counterpoint, i would venture to say that there are many burgeoning young startups in say for instance, asia, that are led by people with just as much energy and passion that may not be as externally directed.

Posted by: kevin at April 29, 2008 10:32 PM

Jeff, I like your strategy and it is one I follow as well. At such an early stage, most companies are pre-revenue and they are also far from their final idea. You are betting on the founders and their general market knowledge - as long as they are smart and resourceful, they have a better chance of making things happen. There is no guaranteed bet however.

Posted by: Darren Herman at April 29, 2008 10:17 PM

It's about deep relationships...at all levels. I saw the differentiation in operating models over a decade ago as the data warehousing industry came into the IT space. It required very contrarian methods. It wasn't about the products that were being offered, because whatever was in the market was already behind the curve. It was about developing relationships with companies that had a sound vision. I was very specific with the account teams -- send your marketing people if you have to, but do NOT show up without your architect.

Even then, I recognized the value of expanding the talent pool. I knew we couldn't 'own' the expertise in all of these things, nor did we want to.

Posted by: Paula Thornton at April 29, 2008 03:50 PM

April 29, 2008

What I look for in Startups

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