Finding "Unicorns:" Questions to Ask Before You Invest in a Startup

TLDR

You want to find out

1. Why has this founder this chosen business?
2. How committed is this founder?
3. What are this founder’s chances of succeeding in this business—and in life?
4. What does winning look like in terms of revenue and my return?

To figure those out, you ask

1. What are you working on?

2. Why are you doing this?

3. Why now?

4. What’s your unfair advantage?

Many people ask me about startup investing and how to get started.

This post — while for informational purposes only and not investment advice — is intended to show you how one successful investor approached the early-stage game.

Jason Calacanis (@jason) has made 125 early-stage startup investments and picked 6 “unicorns” (startups to exceed $1B in valuation) — one out of every 21. Based on his AngelList profile, Calacanis’ investments includes: Tumblr, Cozy, Thumbtack, Rapportive, Uber, Chartbeat, Groundcrew, Evernote, Pen.io, Nimble, Crossfader, Signpost, Calm, many many more. He’s accelerating his deployment of capital and plans to invest in an additional 150 startups over the next 30 months.

Get exclusive content from Tim right in your inbox  Yes, sign me up for Tim's email newsletter. I agree to the privacy policy terms.

The following guest post is an exclusive excerpt from his new book, Angel: How to Invest in Technology Startups—Timeless Advice from an Angel Investor Who Turned $100,000 into $100,000,000. Using stories from his own angel investing career, Jason wrote this book as a playbook for aspiring angel investors.