What are Venture Capitalists and Investors Looking for?

Whether you are a start-up looking for seed money or a seasoned business wanting to get to the next level, an infusion of money into the company is often the best way to get there. Turning to the investor and venture capital (VC) world is more and more common. If you are wondering what investors and VCs might be looking for, you are not alone. This article is the first in our series on what investors what to see, and we’re going to be focusing on the people side of the equation today.

Investors are varied, and so are the things they look for. While there are some foundational items, know that each investor or VC will likely bring their own twist to the table or put more value on a different area than another. That being said, you can use the list below to take a good look at your company and get it ship shape for investors.

 

It starts with PEOPLE.

The foundation of any company is its people and many investors who look to the CEO or the founder(s) of a company as the primary piece they are investing in. This type of investor usually cares more about the person leading the company than even the product or service. Still, others place a lot of emphasis on the personal at the top but consider it just one of several metrics they look at. Regardless of which side an investor leans toward, they all are consistent about what they look for in people.

Investors want to see a mindset of persistence and passion about the product, the business, and the industry. Growing a business is hard, and as many of us know, it will put us in the place of facing unexpected challenges. Typically investors and VC have already walked this road. They know what it is going to take to make a successful business happen. They look for those qualities in the company leader and their key team members.

While the founder or CEO is always on the hot seat when seeking out investors, having a solid team in place is also pivotal. Common questions VC’s look to answer are:

• Does your team work together well?

• Do they have the same passion for the product or service that you as the founder or CEO have?

• How much experience exists in your the team?

During the period of building relationships with and pitching to investors, remember that they will be watching how quickly you respond to emails, phone calls, text messages, etc. If you take days to get back to them now when you are “courting” them, it can send the message that you either aren’t interested or that you’re not reliable.

Even though not all investors base their entire funding decision on the founder or CEO, just know that it is a vital part of every VC’s decision. So let your passion for the product, the industry, the customers, and your employees come through in your interactions with investors. You got into this business for a reason and so did your team. Be real. Be transparent.

In our next installment in September we will take a look at what VCs and investors are looking for in your product or service.

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