View from the VC: four key founder qualities that transfix the world’s best investors.
Brent Hoberman & Liv Price
Building a venture-backed tech startup is extraordinarily difficult. To create value from nothing, build an all-star team, and take an innovative product to market requires an extreme clarity of vision and a superhuman level of grit and determination. But to make things even harder…?
Often, the traits required for founders to build an early-stage company are not the same qualities needed to take the same business to serious scale.
At firstminute capital, we spend our time looking for founders who have the ability to go all the way from a simple idea to a multi-billion dollar company with hundreds of employees.
So, what are we looking for? … And what have we learned about founders who have successfully negotiated the leap from early-stage building, to scaling at pace as world-class operators?
Below are four founder traits that we see in the nascent stages of a business, and the resultant evolutionary qualities that the world’s best founders morph them into.
1/ It starts with raw, magnetic ambition. We invest in the often untested abilities of founders and their aspirational ideas. At this point, a founder is clear about their specific skill set and the area they will drive in the business. Some have the foresight to anticipate their role shifting, or know a co-founder is needed. But, more than anything, they are visionaries beyond their product, and talk to the broader issue they are solving in the market.
… It becomes storytelling. We deal with complicated, frontier technology that is often mystifying to non-tech literate folk. Sharing a snapshot of the vision in one or two lines is crucial. Expanding to weave a compelling narrative is helpful for fundraising and, critically, also doubles up to help employer branding. Employees across all functions should be able to evangelise the business’ purpose, and organically create a viral swell of support behind the company’s brand.
We, as investors, will believe in the vision, but it serves founders in the long run to cleverly figure out how to package this up to an often saturated audience.
2/ It starts with self-awareness. Great founders in the early stages can articulate what they are good at, with an unrelenting confidence in their ability to deliver on their area. However, the truly exceptional also identify their weak spots with a candour that enables collaboration and mitigation through co-founder appointments and key business hires.
… It becomes empowering others. There is a fine line between the areas a founder can lead and the areas they should lead. As a business begins to find product market fit, with a cohort of paying customers, and a growing number of functional leaders, it’s important for founders to reiterate what they themselves take absolute ownership for. Getting specific on what they lead and what they are capable of leading over the next 12–18 months should be communicated company-wide. Gaps can then be identified and a roadmap developed that includes the level of expertise that is required to hire in, or internally promote.
It’s easy to continue expanding a founder’s, often generalist, role to include areas that they otherwise would not have looked after. It requires far more insight to identify the point at which specialists will return better long-term value to your business, in addition to the humility to allow them.
3/ It starts with relentless, sheer determination. Perseverance is often cited as a necessary trait for a founder, and they shouldn’t need anyone else to motivate them. There is an instinctive bias to action, driven by the results they yield. Additionally, exceptional founders tend to have a strong founder-market fit, which at seed is the closest investors can come to de-risking an investment. This founder-market fit creates a deeper level of determination as these founders see themselves as pioneers in a space they are actively disrupting. They have reacted to a firsthand frustration and have pursued a business idea that will hopefully solve that, and disrupt the status quo.
… It becomes agility and knowing when to pivot. Staying true to the vision of the business is paramount, but willing to flex on the original course of how a business grows does not mean a founder fails. Receiving feedback is the helping hand in transitioning fixated founders to accepting ones. Instilling a feedback culture from the inception of a business is key — peer-to-peer, teams, company, leadership — exceptional founders lean towards hiring people better than themselves. Consequently, it’s important to give these same teams the platform to share their views. Companies do this regularly with customer feedback, placing a customer’s experience at the heart of their operation to better iterate their products and, even, pivot the business. Great founders apply this same methodology internally and, importantly, trust their team’s judgement.
4/ It starts with an opportunistic outlook. Great founders have anticipated future hurdles and looked around most corners. Some have role-played multiple scenarios of how their business might look should the market shift. But a deep-rooted unwavering optimism and belief in the purpose of the product should always prevail. Even when challenged through the fundraising process, a great founder believes in the problem and will over-deliver in order to achieve their goal.
… It becomes a consistent and present leader. The flame of optimism continues to flicker as a business scales. Great founders evolve into consistent and present leaders that their teams can rely on. This doesn’t mean having all of the answers; it does mean approaching problems with an open-mind and a willingness to allow others to help. A founder who successfully transitions into a trusted CEO has the ability to create psychologically safe environments that let people experiment and test new ideas, knowing there is a solid foundation underpinning them.
Being a founder is not a static event, nor is it something that happens to you. It is an ever-dynamic and continually evolving process of change that the best operators embrace with zeal. If the world of VC, investment and startups is focused on internal growth… founders should be too.
At firstminute capital, we’re proud to work with a roster of supremely talented founders hell bent on changing the world. What’s more, we take deep pleasure in seeing these same founders achieve both the personal growth and strength of character required to take their startup to the stratosphere.
If you’re a founder who embodies the above, get in touch and talk with our team today: firstname.lastname@example.org
firstminute capital is a $315m AUM seed fund backed by 100+ unicorn founders and star CEOs.
We partner with founders at pre-seed and seed stage, investing primarily in Europe and then the rest of the world. Our ticket size ranges from $250k to $5m. Our team comprises 20 operators and investors from the likes of Index Ventures, DeepMind, Monzo, McKinsey, Goldman Sachs and more — sitting across London and Berlin.