As a venture capital investor, one of the first things that I look for in a potential investment is the entrepreneurial qualities of the founders. Do they have the intelligence, the drive, the vision, the skills and the perseverance to take an idea or concept and develop it to the point where it will be accepted and even demanded by the market?
There are many character traits common to successful entrepreneurs that allow them to see possibilities that others can’t, that make them work harder and longer than most, and that allow them to juggle many different tasks at the same time. Many people believe that entrepreneurs are born with the innate abilities required to be successful and that it is something that cannot be learned in school.
While I believe it is possible to learn the specialized skills and get the required knowledge to invent new products and processes, it is difficult to start a new venture without the unique abilities of the born entrepreneur.
For instance, many universities develop very important and interesting new technologies that lie dormant until they are “rediscovered” by someone either within the university, or more likely from the outside who sees the commercial opportunity in the concept, and more importantly is willing and able to take the idea, dedicate 100 percent of their time and effort, and convert it into a viable product.
Once a concept has been invented and developed, and personal, seed or angel funding has been secured and a skeleton crew hired to prove the commercial viability of the venture, one can get a good idea of whether the concept will be successful. By this point the product is usually developed enough to get valuable feedback from potential customers regarding their willingness to purchase the product. This is usually the stage at which a large institutional investor, or venture capital firm, will get involved with a potential Series A funding. The institutional investor will now typically require that the young company start behaving more like an established corporation with all of the requirements expected of similar companies including such things as more detailed financial statements and controls, a formal hiring policy and programs, an organization chart, well defined allocation of time and duties, sales pipeline and budgets, and more.