Lifeselfmastery's podcast I Startups I Venture Capital
00:16:02 · Rohit Malhotra
[00:16:02] S1: Very interesting. And, you know, you've been part of Shark Tank and you've been investing. So, you know after fourteen seasons and you know you would have listened to close to 5,000 plus pitches, what can you tell about a founder in the first sixty seconds whether you want investment with them or not?
00:16:20 · Marcus Dantus
[00:16:20] S2: Well, look, of course, the founding team is the most important part and the entrepreneur. So if... I look for three things usually. I look for, you know, something that solves a problem or, you know, a necessity that is real, that the solution is differentiated, that it has, you know, competitive advantages, innovation, And of course, the founding team. Now on the founding team, I look for several things. I... Of course, the ethical side and, you know, understanding that we are for the same things. I look for, you know, if I like them or not because at the end of the day, you know, venture capital is like a marriage. You wanna stay married for a little while at least. Even though you know it's gonna end up in divorce eventually, but but so so to like them, I I like to see the team. I I want to see a multidisciplinary team that complements each other, that that has a clear leadership, that, you know, is is is, you know, rowing towards the same goal at the end of the day. So I want them to be open to suggestions and to hear what people tell them, to really listen because look, when you invest in a company, especially in the early stages, I think that the most important thing that you can provide them is contacts or experience or knowledge of the industry more than the money. So if they're not going to take advantage of that, I think it's not a good prospect. And the last thing I think is very important is that they are focused on the business. Many times we got pitched something that was amazing. The numbers look great. The business look great, but the entrepreneur had all the businesses. And if he's not going to focus on one, then I don't think it's a good idea.
00:18:33 · Rohit Malhotra, Marcus Dantus
[00:18:33] S1: Got it and you have a goal of the first meeting is to get to the second meeting you know and that is something which we in sales and business driven also focus on but you know walk us through how founders should design a first meeting around that idea. [00:18:50] S2: Well it's interesting that you brought that up. This is usually what I talk about when I teach entrepreneurs how to pitch And many entrepreneurs are really anxious about saying everything in the first meeting. They want you to understand their business model and their technology and their growth possibilities and everything. And when I say that phrase, what I mean is, you know, you don't need to say any... Everything. As a matter of fact, it's actually beneficial if you don't. Because if you don't say everything, they'll give you a second meeting so that you can, you know, complete the information that you gave them on the first one. My opinion is that no venture capital deal sells in the first meeting, or at least it's my experience. So my suggestion is that you tease them with information, you get them excited, you focus your pitch on that, on the story of being memorable, on being understood. And then you have a second meeting, if you achieve it, where you actually go through the technology or through the product, or, you know, probably they're gonna have some specialists there to test your knowledge, etc, etc. And that's where you have the real opportunity to close.
00:18:50 · Marcus Dantus, Rohit Malhotra
[00:18:50] S2: Well it's interesting that you brought that up. This is usually what I talk about when I teach entrepreneurs how to pitch And many entrepreneurs are really anxious about saying everything in the first meeting. They want you to understand their business model and their technology and their growth possibilities and everything. And when I say that phrase, what I mean is, you know, you don't need to say any... Everything. As a matter of fact, it's actually beneficial if you don't. Because if you don't say everything, they'll give you a second meeting so that you can, you know, complete the information that you gave them on the first one. My opinion is that no venture capital deal sells in the first meeting, or at least it's my experience. So my suggestion is that you tease them with information, you get them excited, you focus your pitch on that, on the story of being memorable, on being understood. And then you have a second meeting, if you achieve it, where you actually go through the technology or through the product, or, you know, probably they're gonna have some specialists there to test your knowledge, etc, etc. And that's where you have the real opportunity to close. [00:20:19] S1: Got it. And you also draw a sharp line between creating FOMO and telling lies. So where exactly is that line and what are the most common exaggeration that you catch? [00:20:32] S2: Well, look, there's... Entrepreneurs have to be very careful about the information they provide. [00:20:40] S1: Yeah.
00:20:40 · Rohit Malhotra, Marcus Dantus
[00:20:40] S1: Yeah. [00:20:41] S2: The information they provide has to be something that an investor understands. Yeah. Something that an investor knows to be true. And something that surprises the investor, but they understand it and understand it to be true. An entrepreneur doesn't know an answer, sometimes what they do is that they give you a bullshit answer. And that answer affects them more than it really helps them. I'd much rather have an entrepreneur telling me, you know, I don't know the answer to this, but I'll find out. It sounds very sincere and honest and, you know, somebody that you can work with. That somebody telling me an absolute liar and exaggeration that I know it's not true. You know, that also tells me a lot about their personality. [00:21:35] S1: Got it. Makes sense. And Marcus, back more than 30 plus startups as an angel investor. So you know, tell us about the ones that you had passed and the one that you have backed that taught you the most because those startups have failed. [00:21:55] S2: Well, first of all, I think by now I backed over 80 startups as an angel investor. Nice. So it's it's grown a lot. [00:22:04] S1: Yeah.
00:22:04 · Rohit Malhotra, Marcus Dantus
[00:22:04] S1: Yeah. [00:22:04] S2: I mean, look, there are some amazing amazing companies that are backed, that are grown. And and and, of course, all of them have different problems and different obstacles that they confront throughout their history and throughout their path. And there are some awful startups. I mean, I'll give you a couple of examples. There there was this startup that I invested in, and the guy took the money and left Mexico, he didn't even create the startup. So, you know, that's that's probably one of the extremes. There are also companies where I put very little money, and these guys have done deals with huge corporations like, you know, Unilever or Nestle and and have started selling their products through them. So there's stories in every single aspect. But if... I've learned something throughout the years. Perhaps the most important lesson here is that every company that does well, it's because of the entrepreneurs. And every company that does badly is because of the entrepreneurs. So without a doubt, I can tell you after investing in, you know, over 80 companies as an angel or close to 80 companies and over probably 30 companies through funds that the entrepreneurs are the most important part of the team. Those are the, you know, the the real success comes from the team, not from the idea. At the end of the day, we all know this. It's about execution, not about not about planning or ideas or anything. It's necessary, of course, but execution is truly what makes it happen.