In early-stage venture, decisions are made with little to no data (at least on the company) available - and often under time pressure.
When it comes to their decision making process, investors can broadly be put into two camps:
1/ Lean on structured processes - think formal due diligence, multi-step approvals, etc to maintain objectivity and ensure critical aspect are properly assessed.
2/ No formal process (unstructured) / rely more on intuition, trusting a gut feeling honed by experience and pattern recognition.
Both approaches have real advantages / disadvantages.
Structured methods reduce impulsive decisions and mitigate certain biases, but they can also lead to missed opportunities if the startup doesn’t fit a predefined mold.
Meanwhile, an intuitive investor can move quickly and seize deals that might appear unorthodox on paper - yet intuition is prone to biases like overconfidence or FOMO.
For founders, it’s valuable to identify which style you’re dealing with.
A structured VC might want as many data points as possible and a thorough plan, whereas an intuitive investor may connect more with your vision and storytelling.
The reality is that especially at pre-seed / seed, most investors are somewhere in the middle.
Yet understanding what side they lean towards more lets you tailor your pitch and improves your odds of forging a strong partnership.
For example at focal, Daniel Darling focuses much more on the vision and storytelling whereas I spend my time on challenging your thinking on how you want to build your business.
