I was pleasantly surprised to see Jonathan Sposato channeling my investing lesson series in his new member-only series Startup Jedi. Great to see that people like to convey information this way and especially exciting that topics such as what the hell are startup investors looking for is interesting to more people than just me!
I haven't profiled Dave McClure yet, I have profiled some other interesting investors such as Howard Lindzon, Chris Sacca, Fred Wilson, Chris Devore, Jeff Clavier, and others on the way. I had previously avoided McClure as he comes across as such a loose cannon. At least the things that he appears to be investing in and the reasons he appears to be investing appear much more on par with a day trader than they do an investor. That made it tough for me as a value investor to understand what was important for his investments. Luckily Jonathan was able to shed some light on the topic!!
Invest in people who can inspire excitement and anticipation for the future yet to be
This can be a tricky one to nail, but I think Dave is right. Investing in people who can explain their vision so well that the team and early adopters almost want the product more than the founder is an important trait. It doesn't mean the idea or team are perfect, but it means that the leader will have a much easier time getting the team on the same page and getting early customer interest. In public markets, Richard Branson seems to do a great job at this.
Invest where other smart people are investing
This shouldn't take much explaining, investing where people smarter than you are investing makes sense. The trick is investing where people smarter than you are investing and where their investment objectives align with yours. For example, don't go make an investment in $IBM just because Warren Buffett did, invest in $IBM because you also have billions of idle cash that you simply can't invest in something with better potential returns.
Invest in companied who know how to spend the investment
Investing is like giving a man a fishing pole. With a fishing pole, a man can do two things sell the pole or use the poke to catch fish. Invest in the person who will take your fishing pole and fish with it, invest in the person who will take your money and put it to use at multiples above the value of investment. That is the only way your investment will create value and growth.