Thanks for helping the community by answering questions.
Based on your personal experience with 200+ startup investments, how do you pick a startup with the limited data available and without understanding other competitors? I know there is no crystal clear answer for this but i want to understand your approach.
Thanks for the question. Quick disclaimer: this is just my own personal preference and experience, this is not to be construed as investment advice! Each investor has their own reasons and criteria when investing, so you need to determine what that looks like for you.
When personally picking a company to invest in, for me, it comes down to two primary things:
1. Does it match my investment thesis (e.g. my "why" for investing - whether it's a company I am passionate about, a market I think will be huge, a technology that I believe could change the world), and
2. Due diligence - e.g. are there any red flags? Are the deal terms fair? etc.
For point one: I recommend investors reflect on the reasons they are investing and what they want to achieve. Are you only looking to maximize financial returns? Do you care about social impact? Are you trying to support local small businesses?
For point two: personally, I follow a "5 T's" approach to due diligence. Due diligence is a topic that could fill volumes by itself, but you can read more about due diligence in two articles I wrote and videos I made:
There are also services out there that will aggregate and review deals to help investors scale their due diligence, such as KingsCrowd (disclaimer: I am currently VP of Product at KingsCrowd).
And ultimately, you should always go to the campaign page and read all the details, including all deal terms. Another gem of information on these pages are the investor Q&A sections. You can not only post your own questions to be answered by the founder, but you can read other insightful questions from potential investors of all backgrounds.
I always read the Q&A. You can learn a lot about the company and how they communicate and handle tough questions.