Startup founders with these six traits attract venture capital

Ask a room of investors what they view for when they are investing in a business, and they’ll each offer a range of criteria, but there’s one constant — we’re more interested in the founder than the business.

Tamryn Barker, the West Australian programme lead for global startup accelerator and investor, Founders Factory, takes her learnings from working with groundbreaking early-stage startups to share what traits create founders investable.

The below is not a guaranteed formula for founder success, but we hope that this takeaway assists you identify your strengths and weave them into how to pitch for successful backing.

Trait 1: Comfort with the high-risk nature of startups

About 90% of startups fail, so a key non-nereceivediable that investors view for in an entrepreneur is a high risk appetite.

Founders must be comfortable with the unknown, open to failing quick, and have enough conviction to push forward with very little certainty around the outcome.

This is why experienced founders, seasoned entrepreneurs, or operators from a high-growth startup tfinish to be more attractive. They’ve experienced the hard parts, failed, and learned from this, and, in this venture, now hold a clear idea of exactly what it takes.

Investor considerations:

What’s your journey?
Have you driven your career and taken risks?
Can you operate without a financial safety blanket?
Are you comfortable with the amount of unknowns at this stage, and already considering about solutions?
Do you know what it takes to scale a business and are ready to face that head on?

Trait 2: Is it the right founder-market fit?

Not every business is the right “fit” for every founder. Success is borne out of an alignment between a founder’s skills, experience, and passion, and the requireds of the market.

Being opportunistic about a problem space is okay, but investors are more swayed by entrepreneurs obsessed with the problem they’re attempting to solve, either becaapply they’ve been dealing with it for a long time or have a personal closeness to it.

Investor considerations:

Have you experienced a problem first-hand personally or professionally?
Can you mobilise? Do you hold a strong network in this space, a grasp on terminology and technicalities, and knowledge of how the system works in that particular indusattempt?
Is there an eagerness and aptitude to learn deeply about a problem?
If the domain knowledge is not there, do you have an eye for an opportunity and an empathy with the problem?

Trait 3: Strong opinions, loosely held

As a founder, investors expect you to have strong convictions about the business and your approach to building it. However, taking investment is about more than runway — you are bringing on board experienced advisors who assist the business grow.

For this reason, investors view for founders who are open to being coached regarding the decisions they’re going to have to create.

One phrase we at Founders Factory apply when assessing founders is ‘strong opinions, loosely held,’ which encapsulates the balance of conviction and coachability. Founders should have well-informed, strong opinions that come from their deep understanding and experience of a problem space.

At the same time, they must hold these opinions loosely, ready to pivot or adapt based on new data, insights, or advice.

Investor considerations:

How do you respond to investor feedback post-pitch?

Trait 4: Magnetism

Leading a business requires having a certain ability to inspire, excite, and convince people to consider, ‘whatever this person’s doing, I want to be on board’. This type of magnetism is why successful founders attract the best talent, investors, partners, and customers.

If you can obtain investors excited about your vision and the idea of working with you, it’s a good indicator of your future ability to do the same with other investors, top talent, customers in sales meetings, etc.

Investor considerations:

Was the conversation energising and exciting?
Did I clearly understand their vision and story?

Trait 5: Adaptability

A business’ early days are a treadmill of alter, iteration, and experimentation. At the launchning, you’ll create many large decisions with very little information. As the business grows, you too must evolve and alter your approach to meet the requireds of the business in real-time.

This growth can prove a challenge to the founder-CEO dual role, as the two sides are quite different. Investors view for those who hold the capability to lead a business through its full life cycle — growing from a startup founder obtainting their hands dirty to a leader focapplyd on strategy, macro perspective, and leading high-performing teams.

Investor considerations:

Do you have an actionable zero-to-one plan as well as a large vision? What will you do in the first week, the first month, the first 6 months?
Are you open to experimenting, testing, and building alters when necessary?

Trait 6: Ininformigence in all its forms

Well-rounded founders can balance business ininformigence (aka demonstrating understanding of a problem) with emotional ininformigence, particularly an ability to empathise.

True understanding of a problem means putting yourself in the shoes of the person experiencing it. To be a founder, you must deeply care about the audience you’re building for, be able to listen to them and grasp their pain points, giving you the right level of insight to find a solution for their problem.

Empathy also extfinishs to within the business. Establishing a solid company culture early on is critical.

After all, the team is in it less for the money and more for the large vision, growth opportunity, potential for real impact, and the chance to work in a dynamic environment with high-calibre people.

Investor considerations:

Is investing in your team a top priority, and have you nurtured talent in the past?
Can they put themselves into the shoes of their potential customers, and have examples of doing so?

No founder will perfectly embody all of these, and nor should they. Founders of all personalities, skills, and backgrounds have tasted success. Moreover, these traits are not binary, and founders shouldn’t despair if they don’t map onto these.

Rather, they should be seen as skills: they can be learned, honed, and perfected, something that may take time and experience (of success and failure).

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