10 Traits You Need To Get Investors
Summary
Summary This study-oriented guide outlines the ten essential character traits venture capitalists and angel investors prioritize when evaluating startup founders. The core thesis is that while founders come from diverse backgrounds, a specific combination of resilience, ethical standing, and intellectual flexibility is required to navigate the decade-long commitment of building a high-growth company.
Q: Why is 'Trustworthiness' ranked as the number one requirement for founders?
A: Investors view the founder-investor relationship as a "marriage" that typically lasts seven to ten years. Because startups inevitably face "touch-and-go" moments and crises, a lack of honesty makes it impossible to have the direct, politics-free conversations necessary for survival. Investors often look for a "crew" or long-term collaborators as a proxy for trustworthiness, as a founder’s ability to retain a team suggests they are credible and reliable over time.
Q: How do investors distinguish between 'Hardworking' and 'Grit'?
A: While related, these traits serve different functions. Being hardworking (Rank 10) refers to the stamina required for the "unending hours" and tedious, non-sexy tasks like accounting or administrative overhead that leadership must handle in the early days. Grit (Rank 2) is the psychological resilience to keep going when facing constant rejection, market shifts, or global catastrophes. Grit is specifically the ability to "grind it out" when everything is against the company, whereas hard work is the daily consistency needed to move the needle.
Q: What is the significance of being 'Rebellious' and 'Ambitious' in the VC model?
A: Venture capital is built on a power-law model where a few massive successes must offset many failures. Therefore, investors seek 'Ambitious' (Rank 8) founders who aim to reshape entire industries rather than build incremental features. 'Rebellious' (Rank 7) traits are necessary because starting a company is inherently irrational; founders must be contrarian enough to ignore conventional wisdom and persistent enough to try again after "dark days" with a defiant attitude.
Q: How does 'Emotional Intelligence' (EQ) manifest in a successful founder’s daily operations?
A: EQ is essential for managing the "emotional weight" of maintaining different narratives for different stakeholders. A founder must be able to sell a "rocket ship" vision to investors while simultaneously addressing the grounded, practical realities of employees and customers. This requires the ability to "read the room" and adapt communication styles without being dishonest, a task that is mentally exhausting and requires significant emotional strength.
Q: Why is 'Curiosity' considered a "secret power" for entrepreneurs?
A: Curiosity (Rank 5) allows founders to look beyond dogmatic, commonly accepted solutions. Like a child constantly asking "why," a curious founder digs deep into how the world works to find non-obvious ways to change it. Investors value this because even if the initial idea fails, a truly curious founder is likely to generate three or four more high-quality ideas based on their observations of the market.
Review Questions
- How does the concept of "Product-Market Fit" relate to the trait of Grit according to the investors?
- Why might a founder who is hardworking but not 'Adaptable' eventually fail?
- What specific question did the GitHub founder use to maintain 'Focus' during the company's growth?
Key Points
- 1
Trustworthiness is the non-negotiable foundation of the founder-investor relationship, likened to a decade-long marriage.
- 2
Grit is the rare ability to persevere through hundreds of rejections and external crises like pandemics or market shifts.
- 3
Founders must balance a high-level 'rocket ship' vision with the emotional intelligence to handle the practical needs of various stakeholders.
- 4
Adaptability is mission-critical because a founder's initial strategy or product may become irrelevant as the market evolves over ten years.
- 5
Extreme focus, often driven by an overarching philosophy (e.g., 'Does it help the developer?'), prevents founders from being distracted by non-essential options.
- 6
Ambition is a prerequisite for venture capital because the business model requires outliers that can reshape entire industries.
- 7
The 'Wantrepreneur' phenomenon is defined by people who like the idea of entrepreneurship but lack the discipline for the 'boring' daily work.