How do angels and VCs gauge the potential of founders? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.
No two Angels or VCs are 100% alike, so your mileage may vary. Here is what I look for:
Vision is the one thing that cannot be hired. Vision is the "secret" the founder has that the rest of the world doesn't know. Or it can be a unique skill with a new technology. Or domain knowledge that is off the charts. It can be a passion and an authentic love for a new approach. In all cases, VISION is the rock in David's slingshot when he fights Goliath. Without vision, a startup is only a small and weak version of a bigger company. Great vision is the asymmetric attack weapon of the startup. People often ask me "Why do you try so hard to protect founders?" It is for this reason. Without the animating force of the founders' vision, ultimately we have nothing that will ever be magical and compelling.
One of my favorite sayings is "It's only over when you decide to quit." Every startup is impossible. Every startup has multiple near-death experiences. Every startup has doubters who will say it is stupid. But great founders have such a profound love for their idea and such extraordinary conviction that their love and passion for their startup conquers all. If there is one thing I can't stand, it's when I end up being on a Board longer than the Founder/CEO because he or she punks out and quits on their own company before I do.
Commitment to AWESOME
Will the founder always strive to do great work that is legendary, with people who are spectacularly awesome? Will this commitment translate to recruiting amazing people who want to work with the founder and each other? Have you ever been in a situation where you and a team were pursuing total excellence? A great founder will not just seek this or hope for this, he or she will demand this.
When you look at the great CEOs, the Larry Page, the Bill Gates, the Mark Zuckerberg, one thing I find remarkable is how fast they all grew. They absorbed new info like sponges about how to hire, how to scale, how to build a culture, how to design a company and not just a product, etc. Insatiable curiosity and the endless commitment to get better and smarter every single day is what takes a founder past product/market fit to legendary greatness in building an awesome business with an enduring legacy.
This one might surprise some people. I have seen that the great founders often have a slight naughty streak. The Airbnb guys scraped Craigslist until they got in trouble. Bill Gates sold IBM DOS before he actually had it and then bought an OS from somebody else for $50,000. We never want founders to be unethical. But we also know that the ability to know which rules to strategically break is an important trait not to be underestimated.
There are a whole lot of other factors we could talk about as well, but I think this is probably my top 5.
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