What Do Investors Look For?

As an entrepreneur I have never had to raise capital because I started my first venture with two credit cards and never looked back.  However, now that I have taken a successful exit from that venture I have been focused on mentoring and investing in new entrepreneurs who are all eager to hear the answer to the question “What do investors look for?”  Each investor has their own criteria, but I have three primary characteristics that I look for.

The first is the people or person who’s founded the startup. I look for a variety of traits within each founder that I talk to to ensure it’s a good investment.  I look at their education, experience, honesty, ethics, trustworthiness, generosity (do they give back?), and drive to name a few.  A founder who is coachable and a good values match for me is someone who is easy to invest in.

The second is the idea. The idea needs to be fluid. It needs to have “legs” or traction. It doesn’t have to be complex, or simple, but it just needs to be interesting to me. There are great ideas that come from great people that I wouldn’t work with simply because I may not be the best person for them.

The third would be their business “concept”. It’s no longer a “business plan”. I look for a business concept that is modify-able fairly easily, so that if they need to pivot it is possible. I can deal with a shitty concept, so the first two characteristics carry greater weight with me.