Asked what matters most when choosing a deal, nineteen investors in twenty point at the founders. The market, the product and the business model each matter to a little over half of them. The team is the one answer nearly everyone gives, and close to half call it the deciding factor outright.
So what are they actually weighing when they look at you? Nine things, more or less, and most of them never appear on a slide.
- Leadership
- Will you fire a friend when the company needs it? Can people follow you now, and could they still follow you at three hundred staff?
- Relevant experience
- Have you worked inside this industry, built a company before, or watched one fail from close enough to learn?
- Depth of thinking
- How far past the pitch have you gone? Do you know where this breaks, and what you will do when it does?
- Drive
- Where does the energy come from, and will it still be there in year four when the work is dull and the money is tight?
- Commitment
- Is this your full-time job, how much of your own time and savings are already in, and what have you given up to be here?
- History together
- How long have the founders worked as a unit, in what roles, and how do you settle a disagreement when it matters?
- Fit between founders
- Do your skills cover each other, and have you written down who owns what?
- Resilience
- What happened the last time something went badly wrong, and how did the team behave toward each other?
- Known gaps
- Which skills are missing, which hire comes first, and can this investor help you find that person?
That list is your real diligence agenda. It also tells you what the reference calls will probe, with people you did not pick, former bosses and former investors among them. Put the honest answers on slide two, name the gaps yourself before someone finds them, and remember that the strongest preparation is not a sharper pitch. It is a track record that sounds the same when someone else tells it.
The weighting figures come from a survey of 885 venture investors at 681 firms by Gompers, Gornall, Kaplan and Strebulaev, published in the Journal of Financial Economics. The nine questions are the ones investors say they ask, in our words.