Entrepreneurs: Stupidest Funding Criteria
by Miki Saxon
Anyone who tracks the startup community hears stories of the stupid criteria investors use when deciding who to fund.
- No strong accents or women with young kids or who are planning on having kids according to Paul Graham of Y Combinator (more on Graham tomorrow).
- An anonymous investor who, although he considered the product and team brilliant, passed because the founder wasn’t Caucasian.
- Age (way off base)
At a guess, I’d say that more than 90% of stupid turndowns are based on standard bigotry.
The other 10% fall in the Stupider category
- Dislike of founder’s alma mater
- Talk funny (Southern, Bostonian, New England, New York, Texas, etc.)
- Grooming bias
Now Peter Thiel has added a new bias that is so silly it calls for a Stupidest category.
Don’t fund anyone wearing a suit.
A slicked-up entrepreneur is inevitably a salesman trying to compensate for an inferior product. Based on this perception, Mr Thiel’s venture fund instituted a blanket rule to pass on any company whose principals dressed in formal wear for pitch meetings.
There’s a basic problem with these kinds of rules.
- No rule can be applied universally, without question and no exceptions.
- Universal rules are just another form of bigotry—one size does not fit all.
But if a suit is a sign of “a salesman trying to compensate for an inferior product” then why does Thiel himself wear a suit?
Flickr image credit: Fortune Live Media
