This morning, I opened LinkedIn and saw 26 new connection requests. Here’s how I decide who I’m actually going to meet.

My Checklist

1) Launched product. No matter what kind of company you have, you eventually need to launch a product.

I invest in software. Most technical founders can pop up a basic product in a few months.

This high school junior made an EMS dispatch tool on his own in just 200 hours! That gives you an idea of what a skilled builder can do.

I could meet founders before their product is launched, but I almost never do.

There are too many pre-launch companies to meet them all. And with nothing in the market touching customers, we wouldn’t have much to talk about anyway!

2) A couple of paying customers. The moment you can get someone to plunk down their credit card, you know you’re on to something.

People can tell you all day long that they love your product. But often, they’re just trying to be nice.

Those who paid are committed.

3) Delaware C Corp. This one might seem odd. Why is some wonky legal thing so important?

Tech startups need to do a lot of unusual things: issue different classes of shares, issue stock options, etc. Delaware C Corps are perfectly suited to do all of this.

If I find out a startup is incorporated any other way, I hold off on meeting the founder. Why should I waste their time if I’m 100% certain I’m not going to invest?

But if you incorporated the wrong way, don’t worry! You can convert to a DE C Corp. It just takes a little time and some legal fees.

4) In one of my markets. I invest in the US and countries very similar to the US…the UK, Ireland, Canada, Australia and New Zealand.

The US is what I know. I don’t know much about Germany or Brazil or Hong Kong.

Beautiful places, I’m sure! But they’re just too unfamiliar.

I don’t know what German customers want. I don’t know what challenges they face.

What’s more, the best startups created in Germany are going to be picked off by German investors. I’m sitting here in New Jersey far, far away. I’m only going to get the scraps.

I’m better off sticking with teams in a familiar market addressing customers in that same market.

Wrap-Up

This checklist is designed to filter the torrent of dealflow I get every day. I’m trying to find viable businesses in areas I understand.

They don’t need to be fully proven out. I love meeting founders early!

But I do want to see the basics in place: a team, a product, and someone using the product.

If you have that, let me hear from you!

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