An article we liked from Thought Leader Tenzin Ozaki on Medium:
What Venture Capitalists Look for in an Entrepreneur — According to Harvard
I came across an article in my MBA communications course. The article, How Venture Capitalists Really Assess a Pitch, was published in Harvard Business Review.
It discusses the observations of Lakshmi Balachandra, Ph.D., who worked in two venture capital firms. She then spent ten years researching the impact of varying degrees of interaction between VCs and entrepreneurs, and the consequential effects on decisions to fund a startup.
She arrived at four conclusions about a VC’s funding decision and best practices to optimize the potential success of a startup pitch. This article will outline Balachandra’s findings, followed by a brief discussion of each.
Balachandra’s Four Conclusions
- Passion is incorrectly assumed to be a positive entrepreneurial characteristic during a pitch presentation. Instead, pitch competition judges prefer a calm and controlled demeanour, suggestive of strong leadership qualities.
- Angel investors prefer strong character and morality over competence. Investors want to work with entrepreneurs who seem trustworthy. A company can hire to match competency weaknesses. For example, a non-technical CEO can hire technical talent. However, there is no easy solution for an entrepreneur with a weak moral character.
- Early investors look for coachability traits. They want an entrepreneur who can be mentored and guided. Early investors often seek higher involvement in the startup to lend their experience and expertise to improve business outcomes. Therefore, they select for responsiveness to coaching and mentorship.
- Stereotypical gendered behaviours influence decision making. Balachandra notes that 94% of VCs are...
Read the rest of this article at medium.com...
Thanks for this article excerpt to Tenzin Ozaki on Medium.
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