You know how the rest of that sage advice goes. Dreamers can only take an entrepreneurial venture so far, but that doesn’t mean they aren’t vital. However, dreamers need to be balanced with doers.
It’s the doers who get the funding – and without funding, you don’t have a business. In this video by StartupGrind, founders and investors talk about what actually gets a check written.
George Zachary of Charles River Ventures says he’s just recently figured it out after 17 years of being a venture capitalist: “Almost all the investments I wrote a check into, I had to have the feeling, ‘Would I be a co-founder of this company?’” In other words, are you barking up the right tree with investors?
This doesn’t mean a venture Zachary passed on wasn’t good. It might just mean he doesn’t have the experience, interest, or time to dedicate to another startup. It’s like dating – just because there aren’t any sparks with someone doesn’t mean they’re not “the one” for someone else. Zachary recalls one of his recent investments, and when the founder was talking about his company, “I was so excited by what he was doing, it was going to change the world. And for me, I was the first person in my family to go to college… I get naturally excited about that.”
Does your startup have to change the world in order to attract investors? Of course not. Anyone who’s watched “Shark Tank” knows that sometimes it’s just the right product at the right time caught by the right investor. Even the pet rock made millions! A lot of people think that founder may have been crazy (or a very committed hippy), and so what if he was?
Google Venture’s Bill Marris says that when looking for a great entrepreneur, they share a lot of similarities with “insane people. You’re looking for incredible persistence and focus, they’re not gonna give up no matter what the odds.” Marris admits that looking at those traits on paper, it could easily identify a “really scary person,” too.
Maybe entrepreneurs are a little scary. After all, they’ve usually given up a steady job (sometimes with a lot of money and power) to focus 100 percent on their dreams. “But at the end of the day, we’re looking for nice people we’re going to work with for years,” says Marris. “Life is short, so you want to find good-hearted people who want to do something good in the world.”
The Perfect Combination
So, an entrepreneur needs to be equal parts scarily committed and nice? The ideal ones are. Gabriel Weinberg, founder of the search engine DuckDuckGo, says he was looking for “hacker founders” when he was on the “duck” hunt for partners. Being frugal and able to take direction was also key. But now? “I’m really focused on someone passionate about it.” That goes for investors, too. Don’t you want someone backing you who believes in the business and you? As an investor now, Weinberg says it’s so easy for entrepreneurs to just give up, “and I don’t begrudge them that.” However, when they’re giving up with your money, that’s a different story.
StartupGrind also taps Ben Horowitz of Andreessen Horowitz, who says, “What happens if the capital markets get way worse in the next round? That’s how you should think about both the amount and the funder.”
Sometimes it has nothing to do with your business – it’s all about what the market is doing (and likely to do).
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