VC who bet on billion-dollar AI firm shares two red flags that stop him investing in a founder

One palmy angel capitalist has revealed 2 reddish flags that forestall him from investing successful a laminitis successful the archetypal meeting.

Carles Reina is an angel capitalist who backed dependable cloning AI startup Eleven Labs erstwhile it was inactive successful its precise aboriginal stages successful 2022. The steadfast was co-founded by Mati Staniszewski and Piotr Dąbkowski, and raised $180 cardinal astatine a valuation of $3.3 billion, successful its Series C backing earlier this year.

In September, the institution announced it was letting employees merchantability shares astatine a $6.6 cardinal valuation. Reina is present a vice president of gross astatine the AI firm.

When Reina archetypal met Eleven Lab's co-founder Staniszewski, helium told CNBC Make It that cipher wanted to put successful dependable AI astatine the time. However, Reina decided to take a accidental connected Eleven Labs aft conscionable 1 meeting.

"We started talking, and wrong 30 minutes of the archetypal conversation, I told him, 'How overmuch wealth bash you want?'" Reina shared.

He explained that the archetypal gathering is captious erstwhile making a determination and Staniszewski displayed definite traits that attracted him arsenic an investor.

"If the archetypal signs are conscionable not there, I usually don't privation to discarded anyone's time… I deliberation you extremity up optimizing ever for precocious prime interactions, [it's] similar you're trying to triage if this is thing that you truly similar and that you privation to walk much clip with the founders oregon not."

Reina opened up astir 2 reasons wherefore helium wouldn't privation to put successful a laminitis aft a archetypal meeting.

One of the cardinal traits that Reina looks for erstwhile gathering a laminitis is technicality.

"This is precise personal, particularly successful antithetic stages. But for me, if 1 of the founders is not technical, similar virtually cannot physique products, is not a researcher oregon thing similar that, I conscionable don't spot the worth successful that due to the fact that they're not going to beryllium capable to determination arsenic quickly," helium said successful the interview.

Reina saw this prime successful Eleven Lab's Staniszewski, who has a first-class honors grade successful mathematics from Imperial College London.

"It was truly absorbing to spot helium was reasoning astir the problems of the full ecosystem earlier adjacent really having immoderate product, oregon earlier adjacent really talking to immoderate existent imaginable customer," helium said.

The 2nd reddish emblem is if the laminitis is trying to physique a institution successful a "very crowded market" which Reina often tries to steer wide of.

"if determination is simply a batch of task capitalists looking astatine that market, due to the fact that it is sexy, I'm conscionable not funny due to the fact that past valuations skyrocket and you extremity up going into a pricing warfare wherever everyone's trying to springiness them word sheets and truthful on," helium said.

When excessively galore VCs privation to put successful a company, it inflates the valuation of that institution which past puts unnecessary unit connected the founders to amusement accelerated maturation and support oregon summation that valuation, according to Reina.

Other reasons mightiness beryllium that the laminitis is successful an manufacture helium conscionable isn't funny successful and it doesn't acceptable his illustration of investments.

"If idiosyncratic sends maine a pitch, oregon I get introduced to idiosyncratic that conscionable doesn't truly bring my attraction consecutive away, I volition archer them consecutive distant 'happy to assistance you connected thing that you request [but] from an angel position oregon investing perspective, it's conscionable not 1 of my things.'"