Written by Toma Kondrate
Photo credit: https://unsplash.com/
All investors surely know how to select startups based on their founders’ personal and professional qualities. But does every founder know if he was really meant to be one? Having a marvelous idea is not enough, on the contrary, it’s just a start line for the rocky journey to successful entrepreneurship.
If such thing as founder’s DNA exists, then probably some of the founders are screwed already by lacking magic genes in their blood. However, if you have a brilliant product and want to get investors’ money, there are certain things that qualify you as a “wanted” or “desperate” founder. So what is the secret formula?
Get your genie out of the bottle
There are plenty of reasons why angel investors, venture capital funds, startup accelerators wouldn’t want to take a risk on you. If you’re a criminal, a lazy-ass or a liar, you’re already in the black list with almost zero chances to make it to entrepreneur. In any other case, you may prepare yourself for a successful venture. StartupHighway, the first Baltic startup accelerator, names few tips on how to win the startup lottery and minimize the risk of failures.
# 1 Get ready for the test
The first phase of your entrepreneurial potential’s evaluation is an examination of your personal qualities and skill sets. Every investor wants to know who they are going to deal with and you’ll get to the top of the list if you’re smart, resourceful, venturous, flexible, innovative and farsighted. Your determination to go until the end is your ticket to big wins. If you pass the test, congrats, it means you fit into the category of founders who are “ambitious and ready to take on their idea to the next level”.
# 2 Shape a decisive vision
Obviously, having a superb idea is not enough. You have to know everything behind it – problem it’s solving, market size, potential growth, even the exit strategy. Investors are not funding startups because they’re simply good-hearted, the truth is they want the payback without the long time lag. The earlier you understand it, the better founder it makes you. In fact, change and adapt your vision as you go – combine it with a real time data. As Reid Hoffman, the founder of LinkedIn, once said, “You don’t necessarily ever end up at that big vision that you were thinking about.”
# 3 Assemble your team precisely
Great startups are made by great teams. You don’t have to be a superman or “I can do it all by myself” guy to set up a world-class business. The power lies in the professional skills of your teammates, so choose your fellows wisely. Avoid the overlap of competencies and cover the most needed skill sets by bringing the right people on board. Think about Guy Kawasaki’s Law of Pre-Money Valuation saying that “for every full-time engineer, add $500,000; for every full-time M.B.A., subtract $250,000” while selecting new team members on board. The aim is to share the trust and compliment each other’s weaknesses, but also to exchange know-how.
# 4 Be resistant to negative answers
Choose to test and fail fast in order to get closer to your wins. Learn to hear “No” and don’t take it for an answer. Imagine it’s a game without game over, simple as that. Each investor counts on your ability to combat failures as that’s how they presume your overall capability to handle future business. If a founder successfully completes the startup level, he will have to pass business scalability level by becoming a powerful entrepreneur. In other words, once you learn how to be a great founder, you’ll encounter next challenge – how to be a great executive.
# 5 Don’t hold on to stereotypes
There are no proven rules when it’s best to start a business. No matter how old you are, how many universities you’ve graduated from or how many books you’ve read – do it now and here. Your skills that you have , your set of beliefs and ideas at this very moment are what can make you a “wanted” founder right now, not after few years. Bear in mind, that procrastination is your enemy in every aspect of your business.
# 6 Get loose from obligations
Your marital status, bank loans, part-time jobs and even previous unfinished projects – are things that hold you back from getting funded by investors or startup accelerators. And hey, don’t take it personally, there’s just no place for unnecessary problems in investors’ world. What they need is full focus on your startup, hard work and overtime you are going to devote.
Founders at their nature – do they exist?
There is no one exceptionally true way to measure “how founder” you are. Ben Yoskivitz points out a great observation in his article about Founders DNA. He says “it’s fair to say that investors of all kinds (angels, venture, seed accelerators, etc.) use their own “guts” to get “a rough feeling” of entrepreneurs and use that as a significant barometer for determining their own interest”. That’s a human nature to make decisions based on the first impression and sixth sense.
Speaking of human nature, another expert in the field, Founder Institute takes a different approach to measure founders’ eligibility by analyzing Predictive Admissions test’s results. According to them, entrepreneurship is destined by personality traits mainly. There is no need to have a company or even a business idea to prove it. The interesting infographic reveals that a great entrepreneur is defined by his professional experience, high fluid intelligence, high openness and moderate agreeableness. And, likewise, the bad founder’s qualities are excuse-making, emotional instability, predatory aggressiveness, deceit and narcissism. With that said, if you have a wrong personality, there’s nothing left as to just deal with it.
It takes many things to unlock success in starting a business – character traits, such as willingness to learn, surpassing expectations, passion for growing; and business acumen. Investors will choose to rely on you because of your business sense, creative thinking, fearless decision making and credibility. You have to be able to walk in the dark and figure out when you’re on the right track. You must feel comfortable in chaos and uncertainty and maintain the fine line between panic and ambition to go further. If you possess all of these features, you’re probably ready to start knocking on investors’ doors.