Investors look for founders who can build a strong team, execute well, and deeply understand their customers. These qualities demonstrate a startup's potential for success and ability to implement feedback effectively.
What this video covers
The first thing is, they like founders who are able to build a great team around them. The thing is that in Jim Collins’ book, Good to Great, he always says that a startup is like a bus without a direction, but if you have the right people seated on the right seats, eventually you will find that direction to success. That’s the same thing with startups.
The execution is a really big one. The minute that you meet for the very first time with an investor, it’s rare that they’re going to give you the check. So, you’re meeting with them Day one here, and over the course of time, you’re giving updates, and you’re telling them how you’re doing, how you’re executing some of the feedback that they gave you and how you’re implementing it.
Founders that know their customers: This is another big one of investors. You’re going to see it when you go to meetings. They’re going to want to hear about your customers, what you know, what kind of data, what kind of information, what you’ve learned, what they like, what they don’t like, what do they look like?
Expertise: They want to know that you know the market that you’re dealing with, that you’ve done your homework about it, and that they’re not giving you the money to make the mistakes. They’re giving you the money to execute. That’s something that investors want and that for them is going to be a super big one. So, when you’re getting in front of them, you really need to convey why you and your team are the right team to execute this idea and what you have done in the past that gives you that edge for the execution and to bring this venture to the finish line.
They want a very big market. They want to invest a company that is potentially taking on a really big market, and those need to be 1 billion dollars and up. Anything under a billion is probably not going to be of interest because ultimately you need to understand that whatever that market is, even if you had the best idea, and the best execution, and the best team if the market is small, that is also going to determine the returns of that investor.
Being able to adapt: This is another really important one because this is going to tell the investor that you’re able to listen, that you can listen to your customers, that you can listen to them, that you can listen to your employees. You need to adapt because essentially what you’re bringing to the market – maybe that business plan or that pitch deck that you had put together one day, thinking that it was going to be a massive success, ultimately, you put it to the market, and you realize that it needed some tweaks.
Focus: This is another one that is super important because the thing about entrepreneurs is that you’re always thinking about what the future is going to be. What can you bring to that problem that you’ll solve? What kind of solution? The problem is that when you start thinking too big or when you start to get other distractions, that is going to be a red flag.
They also want to see the sense of urgency and the passion there because here’s the thing: you need to be crazy, like crazy obsessed with your business. It’s night and day. This is not like a title; it’s not a job; it’s a lifestyle. You’ve come across a crazy problem that frustrated you.
It all started with a personal story of yours and how you brought that to life to address with your solution that problem that you were seeing. It’s all about your personal story. It’s about how passionate you are about that, and that is something that is going to come across during your discussions.
