Today is #DraftDay and for me it reminds me how the NFL draft is like investing in startups.

Here are some similarities 👇
Both NFL teams and investors spend massive amounts of time researching.

For a NFL team:
- scouting players
- analyzing game film
- investigating each player's background

For an investor:
- scouting the team
- analyzing the product/service
- determining size of the market
Both will have subjective values assigned to a prospect based on their own strategy.

NFL team:
- draft for a position of need versus best available
- how high is prospect rated on draft board
- are they a scheme fit
Investor:
- startup in a competitive market versus industry in need of upgrading
- assigned valuation using a method like Berkus, Cost-to-Duplicate, Future Valuation, etc
- do they past the jerk test
Prospects carry risk and both NFL teams and investors are trying to hedge their bets to find the diamond in the rough.

Both are looking to avoid as many misses as possible when choosing which prospect to invest in.
Whether it be the owner, the general manager, or the head coach, whoever has the final say on draft day is making a judgment in the face of uncertainty that they hope will benefit their organization.

Ditto goes for an investor as they hope to find the diamond in the rough.
If you enjoyed this thread, please like and follow me as I continue on my founder journey.

I share my thoughts on startups, building platforms and making a positive impact in the world.
You can follow @hobbesjr.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled: