The 24-Hour Test

As a seed stage investor, I believe I benefit from channeling enthusiasm and excitement. While it’s our responsibility to be thorough and diligent in evaluating entrepreneurs and their ideas, it betrays our job to be too much the cynic or non-believer from the start. Every single company and team we meet can be picked apart in a variety of ways that ultimately would result in passing on the investment. There are always a million reasons why something won’t work and many more than that at seed stage or even earlier.

When my emotional response to a first meeting is excitement, I consider that an important indication of where I’ve ranked a startup concept. I’d argue the genesis of the excitement is born of the right side of my brain and at the very least hasn’t had a negative reaction from the left side. I will usually fixate in the immediate aftermath of the meeting, the idea-pitch-potential sitting prominently at forefront of my mind. The conflict, I’ve found, is in navigating how closely to check or how adamantly to follow that enthusiasm as time passes from that first meeting.

If the literal minutes after are ebullient and positive, what happens with a more gradual passing of hours, days, and inevitable distractions? Did I wake up the next morning with this company as a first thought, the way it was for 90 minutes after the previous day’s meeting? Was I in a rush to tell my mom or a friend or rattle off a opus of a text message to Rob, Dave, Lee, or Jay about such a profound idea? Or has some of the veneer worn off and my enthusiasm abated? Have I lost the spark as a week has progressed and other things have crowded into my brain?

More general measuring stick then precise equation, my home-brewed emotional-reflection filter is one of many indications and data points that impact how we think about things. It may seem too simple, but the 24-hour excitement test has been a telling and intuitive resource for me. Thoughtfully unpacking that emotional response via relevant analysis is the second step in a two-step process that helps determine if we move into formal, deeper diligence with a company - inevitably our largest workload along the timeline of a decision to invest. 

Tim DevaneComment