Qualities that VCs look for in entrepreneurs
Brian Garrett, co-founder of CrossCut Ventures (http://www.crosscutventures.com) explains the perspective of venture capitalists. He lists qualities that VCs are seeking in entrepreneurs, so reflecting these attributes will help improve your funding prospects.
- Dedication & exuberance for their product
- Ability to clearly define the solution through the product
- Demonstrating credibility in the space
- Grounded with realistic expectations
When you’re doing early stage investing and I’ve been doing it for over 10 years now, you know, there is a less metrics to look at. You are looking at concepts, you are looking at strategy, you are looking at very little data to convince you that there’s a business. So, for us in Crosscut Ventures we care most about one, the passion of the entrepreneur and do they have a passion for the market or the product that they want to build? Do they have a philosophy or mindset that we describe as ‘up Everest without supplemental oxygen’, almost craziness to their thinking and belief that they’re going to take over the world.
The second thing that I’ve seen in terms of looking at all these deals and correlating it with success right now is an incredible product vision. You can have good market strategist, you can have great business development executives as entrepreneurs but the best entrepreneurs we’ve seen so far are really ones that have a clear vision and they have defined and crafted the entire product and what they want to build. And they got there because they spent years living and breathing the problem they thriving to solve.
And so that this is the third thing that we’re looking for which is the market or domain expertise. It’s sort of what have they experienced in their life that makes them more credible in coming to us and saying this is a problem in this market and I know how to solve it.
Those three things are super important in the qualities that we look for, but we blend all that sort of enthusiasm and passion and product vision with what I call a rational exuberance. And there is an Italian philosopher named Antonio Gramsci who coined the phrase pessimism of the intellect, optimism of the will. And for me, that’s the balance of I’m going to take over the world, but I’m also grounded in the realities of how tough this job is and this business is. And understanding that the trade-offs that come from belief that you will be incredibly successful, but understanding the difficulties you’ll face along the way.
So again, just to sort of summarize we look for passion, we look for incredible product vision and an understanding of the — how the product will solve the problems. Three, we look for market or domain expertise. And then finally what I call the rational exuberance. It’s sort of that grounded balance of understanding how difficult it is the job that we plan, and those are the qualities we look for.