When Venture Capitalists Meet You, This is What They’re Looking For

When Venture Capitalists Meet You, This is What They’re Looking For
Defensive founders, I’ve found, always fail.
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What are the key attributes you look for in a startup when funding it? originally appeared on Quora – the knowledge sharing network where compelling questions are answered by people with unique insights.

Answer by Ben Parr, author of Captivology, venture capitalist, and curator of Tech Caucus, on Quora:

Four key things I look for, and my biggest “No”. This is not comprehensive.

First, my keys:

  1. Is this product a platform? Or can it be a platform that others can build on top of? Are the founders thinking about how their product can be a platform? In my opinion, this is the difference from a billion-dollar business and the next Facebook or Google. It’s core to my investment thesis.
  2. Founders with domain expertise. YC’s Paul Graham once told me when he evaluates a startup team, he thinks to himself, “If I were assembling a dream team for this startup idea, would it be the team in front of me?” If you’re going to tackle a complex legal startup, you better have at least one lawyer on the team. The best teams I find are ones that consist of someone with direct domain expertise and one with indirect expertise who can think about the problem their target industry faces differently.
  3. Founders who have known each other for a long time. If the founders have known each other for less than 18 months, don’t bother pitching me. It’s a shotgun marriage and in my experience those almost never work.
  4. Is there technological or customer or user traction? Don’t come to me without numbers that show people want your product. It shocks me that so many founders come in with an idea and have no proof their theory might be right. You can do tests or launch a product and show that users are joining, that customers are interested, etc. and you’re in a far better position.

And No:

  • Defensive founders. I am happy with founders who can absorb critical feedback or thoughtfully and politely disagree with my assessments. What I can’t stand is a founder who gets heated when I look for weaknesses in his or her business model, whose thick head doesn’t allow them to consider other possibilities, who isn’t capable of filtering good and bad feedback. Defensive founders, I’ve found, always fail.


March 23, 2016 / by / in , , , , , , ,

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