When networking within the entrepreneurial tech community, one eventually hears an investor say, “Ideas are a dime a dozen. People who implement them are priceless.” This quote is originally attributed to cosmetic entrepreneur Mary Kay Ash.
The quote captures the challenge that investors face when an almost endless number of great ideas are pitched to them for funding. They know it is about choosing the entrepreneur who has the necessary skills and traits to successfully execute their vision.
This challenge is often a topic of discussion on investor panels where they are asked, “What are the traits you look for in an entrepreneur?”
Here are a few of the commonly shared views about successful entrepreneurs: (not in any rank order)
The entrepreneur needs depth of experience. This refers not just to the industry of their startup, but also includes whether they have overcome a great challenge. Investors prefer prior startup experience—whether successful or not. They look at an entrepreneur’s history as one way to assess decision making skills, temperament and talent---that they see as critical to being a successful entrepreneur.
The entrepreneur must be coachable. He or she must know how to take advice from experts and seasoned industry executives who are very important in helping a venture move past hurdles that first time entrepreneurs have not previously encountered.
The entrepreneur needs to be a leader in terms of character and charisma that will make people want to follow him or her—particularly under the conditions of a startup when involvement has high risk and high stress, and initially low reward.
The entrepreneur should be adaptable. Once their venture is funded and the product or service is on the market, investors want the entrepreneur to embrace market feedback and make the necessary business plan changes that will better marry the company’s deliverable to the audience they are targeting.
The entrepreneur must be trustworthy. Investors want the entrepreneur to give them accurate and timely information about problems in the venture. Many first time entrepreneurs fail this test that sometimes permanently taints relationships, as well as jeopardizes follow-on funding.
The entrepreneur must have passion for their venture. An entrepreneur who has an unrelenting doggedness about their vision gains the attention of investors because the investors want an entrepreneur whose motivation goes far beyond money. It is passion that drives ultimate success.
Experienced investors have learned how to size up people. While these are not all the traits of successful entrepreneurs, they are the traits that investors commonly include in their selection process. That is because they have seen enough deals to know that if the entrepreneur does not have certain traits or particular skills the likelihood of successful execution greatly diminishes. That is a risk based on experience that they know not to take.