Recently, iAngels’ Founding Partners, Shelly Hod Moyal and Mor Assia, hosted a webinar for our investor community. The topic of the webinar was: “What Investors Should Look For in Entrepreneurs”.
The following is a rundown of the key points highlighted during the talk, and you can find a video summary of the webinar below.
The following is a list of ten key points, not in order of importance, outlining what investors should be looking for in entrepreneurs when considering an investment. People talk about team team team all that time, but what are we really looking for?
It is critical that the the founder is fully committed to the venture. Bootstrapping or having skin in the game goes to show that the founder is putting his money where is mouth is and is willing to take that personal risk in order to ensure company growth.
It is important to see that the founder has thought this through. The founder needs to show that he has done the market research, looked into the competitive landscape, and created an ambitious but achievable business plan that is not detached from market standards and expectation. If you can think of a question at an initial meeting that the founder does not know how to answer, the research wasn’t thorough enough.
Founders need to be exemplars of resilience in order for them to be able to overcome challenges and work well together for many years.
When founders avoid becoming political and are not ego driven, you know that they are focusing on the business and not on their own agenda. It is important to understand the dynamic of the founding team.
5. Vertical Expertise
It is expected that a founder has decided to uproot his life and leave his previous job stability because there is something he is so passionate about, that he cannot live another day without making it a reality. This usually (but not always) means that the founder knows a thing or two about the space he wishes to enter.
Expertise is very important and must be ingrained in the founding team. Working in the specific sector for several years before starting the business, usually shows that the founder has identified a challenge in the space that he is now about to tackle.
6. Track Record
Starting a company is hard, but selling a company or taking a company public is even harder. Out of the global pool of entrepreneurs, there are not too many people who have already succeeded in doing so, and even if they did it is important to realize what returns their previous investors actually saw.
A serial entrepreneur is someone who is able to perform consistently, learns from his previous experience, and is now looking to do things bigger and better. Experienced entrepreneurs bring a lot of know-how into the business and have the ability to see another company through.
7. Diversified Skill Set
When constructing a founding team, there needs to be several pillars in place. Some angels favor companies that have a marketing expert, a technology expert, and a business development expert on board in order to succeed. Having a complimentary skill set in the founding team eliminates ensures the scalability of the company.
8. Fundraising Abilities
The founders need to be able to tell a story. Young companies are constantly raising money. Inability to communicate the vision, the mission statement, the story and the technology in a way that is audience focused to investors, is a major issue. Execution and meeting KPIs should be what the CEOs are focusing on and as founders are able to conduct successful rounds they are able to get back to business.
Traits such as flexibility and agility will help founders overcome obstacles. Over achievers by nature are relentless and cannot seetle for mediocrity. Being responsive and respectful of other people’s time shows that the founder is humble and understands the fact that there are many smart people in the world who can help.
Startup investing is risky. If the vision is not big enough, it might not be worth attempting. Many founders have a good product, but what is going to happen with this product in a year or two from now. Founders not only need to have a product to sell, but they need to understand how to build a company around it. If the founder cannot convince you to buy into his vision, how will he build a successful company around it?