“I aim to optimize for high-quality interactions,” he explained. “If the initial indicators are missing, continuing the dialogue only wastes time for everyone involved.”
Red flag 1: a non-technical founding team
The primary attribute Reina seeks is technical competence among the founders. Unless at least one co-founder can build the product or conduct core research, he believes a startup will struggle to iterate quickly.
Staniszewski met this criterion through a first-class honors degree in mathematics from Imperial College London and hands-on product expertise. According to Reina, the ElevenLabs co-founder could articulate solutions for ecosystem-wide challenges well before a prototype existed or potential customers were engaged. This depth of understanding reinforced the investor’s confidence in the team’s ability to execute.
Reina emphasized that his preference for technical founders is personal and can vary by investment stage. However, for pre-seed or seed rounds, he rarely proceeds if no founder can write code or contribute to research. He argues that startups lacking internal technical leadership often depend on outsourced development, slowing progress and increasing costs.
Red flag 2: overcrowded markets
The second factor that deters Reina is an excessively crowded market, especially one drawing significant attention from venture capital firms because it is perceived as “hot.” He avoids sectors where multiple investors are competing to write term sheets, a dynamic that quickly inflates valuations.
Elevated valuations can create pressure for rapid growth, potentially forcing founders to prioritize short-term metrics over sustainable development. Reina observed that when too many investors pursue the same opportunity, the company’s trajectory can become distorted by expectations tied to an artificially high price tag. Research published by Harvard Business Review notes similar risks, indicating that inflated early valuations often lead to challenging subsequent funding rounds if growth fails to keep pace.
Imagem: Getty
For these reasons, Reina tries to identify niches that remain underexplored or undervalued. In 2022, voice AI fell into this category. With limited competition, ElevenLabs could focus on product development without distraction from valuation pressure.
Additional filters
While technical gaps and crowded arenas are his main deal breakers, Reina also declines proposals in sectors outside his personal scope of interest. In such cases, he informs founders promptly that he will not participate as an investor, though he remains open to offering advice.
This approach reflects a broader strategy of concentrating his resources—both financial and temporal—on areas where he can add the greatest value. By limiting his portfolio to businesses aligned with his expertise, Reina believes he can maintain meaningful engagement and improve overall investment outcomes.
Background on ElevenLabs
Founded in 2022, ElevenLabs develops artificial intelligence tools capable of replicating human voices with high fidelity. The technology has applications in media, entertainment and accessibility services. After closing its Series C round earlier this year, the company’s valuation rose from $3.3 billion to $6.6 billion on the secondary market, signaling strong demand for its shares even before a public offering.
Reina joined the company as vice president of revenue following his angel investment. His transition from external backer to executive underscores the confidence he placed in the team and product during that initial half-hour encounter.
Looking ahead, Reina will continue applying the same filters—technical leadership and market differentiation—when evaluating new founders. For entrepreneurs, his red flags provide straightforward guidance: build core expertise within the founding team and select markets where competition, not hype, drives value creation.
Crédito da imagem: Getty Images
