When I invested in Palantir in 2009, I barely understood their business model.
I invested because a friend had joined as an early employee a few years prior. This friend was one of the most brilliant & determined people I had ever met. He was in awe of the talent & mission at Palantir. After getting to know many of the early team members, so was I.
Palantir opened a bridge round in early 2009. Amidst the chaos of the Great Financial Crisis, I decided that giving a check to the smartest group of people I knew was the safest investment I could make.
My next few years were lean. I had to raid my 401k to pay rent. But once I had more cash flow in 2011/2012, I returned to angel investing. The success of Palantir gave me confidence to experiment with different strategies - investing based on traction, based on market, and so forth.
Ironically, our strategy today at HorizonVC has ended up near to where I started with Palantir - investing in exceptional people or, at the seed stage, in “blank check founders.” That is, investing in founders because they are amazing, without thinking too hard about things like TAM or traction or business model.
At HorizonVC, we do think hard about business models - we favor investing in bottoms-up software businesses. But we care even more about investing in great founders. We want every investment to be in founders who are so impressive that we would consider them Blank Check Founders.