Skyping in from the Silicon Valley to CHINICT, the Founder and CEO of AngelList, Naval Ravikant talked about his style of investing and take on China.
AngelList is the most prominent purely online network for start-ups and investors to connect. Acting like a dating site for start-ups and investors, the platform has empowered both sides to build a trusted profile and communicate with each other. Some of the prominent deals that have been done are Uber, Pinterest, Foodspotting and Skillshare.
Now that China’s investment market is heating up, it was only a matter of time before a Chinese AngelList was created. The most similar Chinese versions are AngelCrunch, a rather unoriginal named combined of AngelList and TechCrunch; and 36Tree. It will be interesting to see how these investing networks can overcome China’s cultural need to have strong personal networks before doing any deals. At least it can provide a means to connect first.
Naval is a strong entrepreneur and investor in his own right. According to Crunchbase, he was a co-founder at Genoa Corp (acquired by Finisar), Epinions.com (IPO via Shopping.com), and Vast.com (large white-label classifieds marketplace). He has advised Bix.com, iPivot, and XFire, among others, and invested in many companies, including Twitter, FourSquare, DocVerse (sold to Google), Mixer Labs (sold to Twitter), Jambool (Social Gold), SnapLogic, PlanCast, Stack Overflow, Heyzap, and Disqus.
When asked the key things he looks for, he said when investing at such an early stage, he makes an emotional investment because there is not much else to judge it on. He specifically looks for at least one of these things: a unique product that is difficult to copy, an awesome team and traction or social proof that there are willing buyers who will pay money for the product or service.
On the topic of coming to invest in Chinese start-ups, he said he doesn’t understand the Chinese market well enough yet. When investing at the angel level, many are done through relationships and networks; something Ravikant doesn’t have here. Local knowledge and connections is are for foreign investors to build in China; however there are some exceptions like Tim Draper of DFJ who was a very early investor in Baidu.
When Ravikant was asked about if he were to do another start-up, how he would do it; he responded by firstly choosing the best team and secondly doing a business that he genuinely loved and believed in. Doing a business or start-up will be an arduous journey and he rightly acknowledges that “every single day as an entrepreneur is extremely difficult.”
Photo credit: CrunchBase