VC who backed billion-dollar AI agency shares two pink flags in founders

One profitable angel investor has revealed two pink flags that forestall him from investing in a founder within the first assembly.

Carles Reina is an angel investor who backed voice cloning AI startup Eleven Labs when it was nonetheless in its very early levels in 2022. The agency was co-founded by Mati Staniszewski and Piotr Dąbkowski, and raised $180 million at a valuation of $3.3 billion, in its Sequence C funding earlier this 12 months.

In September, the corporate introduced it was letting staff promote shares at a $6.6 billion valuation. Reina is now a vice chairman of income on the AI agency.

When Reina first met Eleven Lab’s co-founder Staniszewski, he informed CNBC Make It that no one wished to spend money on voice AI on the time. Nonetheless, Reina determined to take an opportunity on Eleven Labs after only one assembly.

“We began speaking, and inside half-hour of the primary dialog, I informed him, ‘How a lot cash would you like?'” Reina shared.

He defined that the primary assembly is important when making a call and Staniszewski displayed sure traits that attracted him as an investor.

“If the primary indicators are simply not there, I often do not wish to waste anybody’s time… I feel you find yourself optimizing at all times for prime quality interactions, [it’s] such as you’re attempting to triage if that is one thing that you just actually like and that you just wish to spend extra time with the founders or not.”

Reina opened up about two the reason why he would not wish to spend money on a founder after a primary assembly.

One of many key traits that Reina appears to be like for when assembly a founder is technicality.

“That is very private, particularly in several levels. However for me, if one of many founders isn’t technical, like actually can’t construct merchandise, isn’t a researcher or one thing like that, I simply do not see the worth in that as a result of they don’t seem to be going to have the ability to transfer as shortly,” he mentioned within the interview.

Reina noticed this high quality in Eleven Lab’s Staniszewski, who has a first-class honors diploma in arithmetic from Imperial School London.

“It was actually attention-grabbing to see he was interested by the issues of all the ecosystem earlier than even truly having any product, or earlier than even truly speaking to any actual potential buyer,” he mentioned.

The second pink flag is that if the founder is attempting to construct an organization in a “very crowded market” which Reina usually tries to keep away from.

“if there’s lots of enterprise capitalists that market, as a result of it’s horny, I am simply not as a result of then valuations skyrocket and you find yourself going right into a pricing battle the place everybody’s attempting to offer them time period sheets and so forth,” he mentioned.

When too many VCs wish to spend money on an organization, it inflates the valuation of that firm which then places pointless stress on the founders to point out speedy progress and preserve or enhance that valuation, in line with Reina.

Different causes may be that the founder is in an trade he simply is not involved in and it does not match his profile of investments.

“If somebody sends me a pitch, or I get launched to somebody that simply does not actually deliver my consideration right away, I’ll inform them right away ‘blissful that will help you on something that you just want [but] from an angel perspective or investing perspective, it is simply not one among my issues.'”