Death by a thousand cuts

A fairly common phenonemon in seed investing is when an investor doesn’t commit to invest within the first few hours of meeting it’s very likely they’re going to pass.

If they’re on the fence after meeting, one of the first things an investor will do after an intro call or meeting will be to “dig in” to the market, available data, product, cap table, etc… (if any of these exist) by sending a detailed, often thoughtful list of questions.

The detailed list of questions is usually an exciting email to receive for founders. “Oh! Look at this long list of questions! They’re totally interested!”

The somewhat confounding effect of providing this information however, is that most times, the information only serves as confirmation bias to the investor that their initial hunch was correct and that they should in fact, pass on investing.

When flooded with information, it’s easy to see something you don’t like about the opportunity that you think is going to torpedo the company’s chances of being a big success.

I think the best founders are able to control the aperture of the conversation to maintain focus on the biggest opportunities and how you intend to exploit some market anomoly or unique insight to your advantage.

This is the asymmetric information that investors are looking for. What secret do you know about the world that nobody else knows and how are you going to make it reality?

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