Beyond the basics: 5 surprising qualities investors seek in a winning team

By Vital Laptenok, general partner at F1V

Catching an investor's interest is just the first step; it doesn't guarantee funding. To secure investment, a startup needs more than just a good pitch. A successful startup needs a "perfect match" between founders and investors, a product-market fit and a strong founder background.

Investors, however, pay as much attention to the personal qualities of the co-founding team.

As a venture capital firm's general partner, my conversations with VCs and angel investors have given me valuable insights into the fundraising process. In my experience, there are at least five qualities that investors look for in a founder that may not be immediately obvious.

Thinking in absolutes is considered flawed by many. For people thinking this way, everything seems either good or bad. Yes, this approach ignores various shades of color, but it's a good trait for founders — they become reliable, predictable and somewhat safe.

Entrepreneurs with black-and-white thinking won't waste time and money doing things half-heartedly. They're all in, focusing on doing things flawlessly.

Based on an analysis of in-depth assessments of 17,000 executives, Harvard Business Review reported that entrepreneurs with a strong bias for action and decisive thinking are more likely to succeed.

Entrepreneurs who neglect productivity tools like Notion, Google Keep, Notes, ChatGPT or other AI tools that significantly speed up work are like Uber drivers who shun navigation apps. These instruments help not only keep plans, ideas or conversations in mind but also make routine processes quicker. For instance, I use ChatGPT to write emails, generate ideas or find non-trivial solutions.

Similarly, if we fail to record our ideas, they can slip our minds. This can result in missed opportunities, such as failing to launch a planned ad campaign or overlooking a cool feature. Individuals who vividly describe or visualize their goals are 1.2 to 1.4 times more likely to accomplish them.

Writing things down also shows discipline essential for a startup's success; it indicates that entrepreneurs have thought through their business concept and are committed to executing their plans. It also enables effective communication of their vision to investors.

Great founders can be shameless and bold in business while remaining humble and caring in their personal lives.

Working exhaustively on a startup can lead to burnout rather than prosperity, with 87% of startup employees agreeing that their work affects their mental health. Investing in relationships, both romantic and with friends, can lead to a robust and successful company, as it shows that the founders know how to manage their time and prioritize effectively.

Additionally, it's advantageous for a startup when its founders' personal lives or hobbies align with the company's focus. For instance, if one of the founders is passionate about filmmaking and creates an AI-powered solution that streamlines the process, or if the co-founders design a product for children while having kids of their own. This demonstrates that the team has an intimate understanding of its user base.

I greatly admire founders who persist in building and launching new companies even during crises, wars and pandemics.

Ukrainian entrepreneurs are currently setting an inspiring example of resilience to the world. Despite experiencing power outages, communication disruptions and missile attacks, they successfully continue their operations. They buy Starlinks and diesel generators, evacuate employees, and show flexibility to keep their businesses running.

One Ukrainian edtech in our portfolio provides online tech courses. When teachers have no access to electricity or the internet, they conduct classes over the speakerphone, and students take notes on programming in their notebooks. The class schedule has become highly flexible, with lessons held whenever students and teachers can access electricity — even at night.

Resilience is the most crucial trait for an entrepreneur, so we always try to assess the founder's problem-solving skills. This helps us understand if their early-stage startup can survive in a challenging world.

While storytelling can be effective in advertising, one can only partially rely on it when building a solid team or earning the trust of partners and investors. VCs seek leaders who are transparent about their ambitions, intentions, business goals, and failures.

In the startup world, things don't always go as planned. In case of a decline in your financial or operational performance, don't keep it from investors' eyes. Instead, provide a concise explanation of potential factors contributing to the situation and outline the steps taken by your team to address it.

Trust me. No one will scold you. Investors are interested in your startup growth, so together you will find a solution to any challenges. That's why it's crucial to keep them informed.

This article originally appeared on Entrepreneur, titled "Beyond the Basics: 5 Surprising Qualities Investors Seek in a Winning Team."

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