This Week in Startups Sunday VC School: valuation vs. traction matrix + Climate: New Energy Nexus CEO Danny Kennedy | E1356
Jan 9, 2022
Danny Kennedy, CEO of New Energy Nexus and a seasoned leader in clean energy investments, joins the conversation to shed light on the evolving climate tech landscape. He discusses what he seeks in clean energy investments, emphasizing the critical role of traction over mere valuation. Kennedy also addresses the barriers that hold investors back from committing to climate startups and compares the intricacies of investing in hardware versus software. His insights highlight the pressing need for innovation in the renewable energy sector.
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Investment Stages and Valuation
- Determine the stage of startups you want to invest in, from idea to revenue.
- Consider the valuation versus traction matrix to find value and avoid overpaying.
Valuation Traps
- High valuation with low traction is generally bad, except for serial founders.
- Charismatic founders can create a reality distortion field, leading to overvaluation.
Multiple Bets vs. Single Bet
- Invest in multiple early-stage startups for the same price as one high-valuation bet.
- Accelerators offer lower valuations and improve founder skills, increasing success chances.