VC Who Backed Billion-Dollar AI Startup Reveals Two Red Flags That Stop Him from Investing

Carles Reina, an angel investor who made an early bet on voice cloning startup Eleven Labs before its multibillion-dollar valuation, has revealed the two main warning signs that stop him from investing in a startup founder after a first meeting. Speaking to CNBC Make It, Reina outlined the critical factors that shape his investment decisions, drawing on his experience with one of the fastest-growing companies in artificial intelligence.

Reina, now vice president of revenue at Eleven Labs, invested in the company when few believed in the potential of voice AI. Founded in 2022 by Mati Staniszewski and Piotr Dąbkowski, Eleven Labs has since raised $180 million in Series C funding at a $3.3 billion valuation. In September, the company allowed employees to sell shares at a $6.6 billion valuation, underscoring its rapid growth and investor confidence.

Reina recalled that when he first met co-founder Staniszewski, nobody wanted to invest in voice AI. Despite the lack of enthusiasm from others, Reina said he was convinced within half an hour of their initial discussion. “We started talking, and within 30 minutes of the first conversation, I told him, ‘How much money do you want?’” he said.

Man talking on the phone and using two laptops | Source: Pexels

He emphasized that the first meeting is a crucial moment for determining whether to pursue an investment. “If the first signs are just not there, I usually don’t want to waste anyone’s time… I think you end up optimizing always for high quality interactions,” he explained. “It’s like you’re trying to triage if this is something that you really like and that you want to spend more time with the founders or not.”

Technical Ability as a Decisive Factor

The first major red flag Reina highlighted is a lack of technical ability among a company’s founders. “For me, if one of the founders is not technical, like literally cannot build products, is not a researcher or something like that, I just don’t see the value in that because they’re not going to be able to move as quickly.”

Reina said this technical foundation was one of the reasons he decided to back Eleven Labs. Staniszewski, who holds a first-class honors degree in mathematics from Imperial College London, impressed him by thinking deeply about the broader challenges facing the AI ecosystem before a product even existed or talking to any real potential customer.

Avoiding Overcrowded Markets

The second red flag for Reina is when founders are trying to build companies in overcrowded or overly “sexy” markets attracting excessive venture capital attention. “Then valuations skyrocket and you end up going into a pricing war where everyone’s trying to give them term sheets and so on.”

According to Reina, inflated valuations can put significant pressure on founders to achieve rapid growth and sustain high expectations, which often leads to unsustainable business strategies.

Man checking data on a tablet and a laptop | Source: Pexels

Selectivity and Focus

Reina’s disciplined approach underscores a broader philosophy in early-stage investing: that strong technical foundations and clear market differentiation matter more than trends or hype. His early confidence in Eleven Labs — now one of the world’s most valuable AI startups — highlights how identifying the right founder at the right time can yield extraordinary returns.