Approaching a venture capitalist is an ideal way to acquire funding for start-ups. VCs are equity investors who provide capital to companies having high growth potential. In exchange, they acquire equity shares in the company that will become their profit margin.
Not only capital but venture capitalists are beneficial for exposure and mentorship. There’s no doubt in asserting that start-ups can acquire a lot from the VC community to nurture their growth.
Approaching a venture capitalist is seemingly effortless, but the real challenge is to convince a VC to make a capital investment. It is a full-fledged process that includes creating a pitch deck, doing a valuation, and proving the worth. There are tons of start-ups in the line who are trying to grab the attention.
So, how are you going to create an impact as a company?
Founders are the face of the companies whose capabilities decide the success. VCs will not dig into the start-up or its ideas, they will look deep into the founders and determine whether they are worth a shot.
How do they do that?
Venture capitalists search for some valuable traits in a founder that clearly states their brilliance to manage a business. We are here to discuss those traits of a startup founder that VCs are looking out for.
#1 Passion At Its Best
Steve Jobs once said that people with passion could change the world. Indeed, passion is the ingredient that makes the formula of success. Venture capitalists are exploring successful founders who have an unaltered passion for their business. It is one of those traits of a startup founder that does not have any substitutes.
No matter how great an idea can be, if the entrepreneur is not passionate enough to create it, nothing will ever matter. VCs will always prefer a passionate and success-driven founder compared to those who have many ideas to juggle with. It’s only passion that can bring results to the business because ideas can only work out when you have unwavering dedication to thrive.
#2 Communication Skills That Tops Everything
Having good ideas and a passion for making it functional is not enough. One must be able to sell their ideas, which can be done with exceptional communication skills. Founders must be able to explain their ideas to investors, customers, and other partners. VCs will thoroughly analyse the communication skills of founders during the pitching session.
It’s only their expression that will help founders sell their brand and emerge as a strong business personality. Verbal communication is not the only trait, but body language is equally important in framing the personality. VCs will prioritize founders who can create a lasting impression on them.
#3 Risk-Taking Attitude
Business is a risky matter, and you cannot survive in it if you do not have a risk appetite. Not all startups can become Google or Facebook without combating the failures and overcoming the risks. The risk tolerance of a founder will determine the growth rate of a company. VCs are looking for strong founders who are willing to take risks and capable of bringing the company to success.
When you can take risks, it will become easier to calculate them beforehand and reduce their impact. This way, they will fine-tune their plan or create contingency strategies to tackle the challenges. Without knowing the potential risks, there’s no way you can face them.
#4 Undying Perseverance
How much do you want your dream to come true? How dedicatedly can you work to turn your ideas into a business plan? To what extent can you go to increase the brand value? All these things matter when you enter the business world. Perseverance is that X-factors that differentiates winners from the others.
Only promising entrepreneurs are able to go beyond their limits to achieve their goals. VCs are rooting for such founders and want to invest in their company. However, perseverance should not turn into stubbornness which will only lead to losses. A founder must be zealous but not arrogant, smart but not cunning. That’s how they will get attention from the VCs.
#5 Ability To Adapt And Evolve
With the changing business scenario, entrepreneurs should be able to adapt and evolve. Profits and losses will keep changing with time, and an entrepreneur should not be affected by that. VCs are looking for founders who are ready to accept the changes and evolve with time. It is the only way to survive in the market and bag a unique stance on a global front.
Moreover, adaptability is important to tackle different challenging scenarios with ease. To ascertain the ability to adapt and evolve, VCs will ask certain situational questions to depict their brilliance. It is a flexible approach to find the ideal entrepreneur.
#6 Deep Industry Knowledge
Traits of a startup founder do not only revolve around their personal qualities but also depend on their knowledge and skills. Having industry knowledge is essential to steer the company towards success. Irrespective of the domain, VCs will only prefer founders who have in-depth industry knowledge. Extensive knowledge will only prove to be beneficial in understanding the market fluctuations and other complexities.
In this competitive business world, having no industry-specific knowledge will lead to chaos. You don’t need to complete a course to become a founder; with active research, regularly updating yourself with facts and talking with industry experts is enough to get through.
The Bottom Line
It is the founder that sells a business. A founder’s capabilities and efficiency accelerate the growth of a company. Their passion, perseverance, risk-taking attitude, etc., will set a pathway towards success. Entrepreneurs should be able to communicate their ideas and overcome the risks to nurture their business.
That’s exactly what venture capitalists are looking for. They need a founder who can rightly fit into their expectations of excellence. The scenarios can be different every time, but these traits of a startup founder will always be the parameters to gauge a company’s efficiency.
