What Investors look for in Entrepreneurs

by 21212
Thursday, April 18th, 2013

Exame.com recently released an article, featuring 21212 partner Frederico Lacerda, that explains the characteristics and values that investors look for in entrepreneurs. To read the article in Portuguese, follow this link. For those who prefer an English version, take a look below at the translation.

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What Investors look for in Entrepreneurs

The success of a start-up does not only depend on a great idea, but also the characteristics of the entrepreneurs on the team. “When we evaluate a project, we have various criteria. Some are objective and some are subjective. The first thing is to affirm that the entrepreneur has energy and engagement, explains Fernando Campos, angel investor and director of Devise.

However, it is also important not to confuse excitement and an enthusiastic pitch with engagement. What investors want to see is the real behavior of the entrepreneur. “That makes the difference and shows that he has the capacity to really deliver results” explains Frederico Lacerda, co-founder of 21212 Digital Accelerator.

In order to capture the attention of angel-investors and get the investment needed, it is important to stay attentive to specific details. Below are some tips to help see exactly what investors are thinking and examining.

1.       Engagement and Interest

The entrepreneur’s strong desire and persistence are the fuels for a start-up. It is important to see that an entrepreneur runs after his goals and has resilience.

 “If they don’t take notes during a meeting with investors, don’t have a habit of preparation and don’t even take the time to read the website of the business before, that is already a bad sign,” explains Campos. It is essential to bring materials to present and be prepared to respond to questions about your start-up.

 2.       Professional Posture

The capacity to do business and network is indispensable for entrepreneurs. Lacerda points out that “a flaw that we see today is entrepreneurs networking with the intention of getting something out of it and not just to stay connected and learn from people.” Finding the right situations that allow you to position yourself well in the market also really works in your favor for investments.

Accepting new ideas and concepts for your business is also fundamental. “There are very stubborn entrepreneurs and there are ones that accept everything and don’t argue. The worst is the entrepreneur who pretends he is not stubborn, accepts everything, and then later ignores it” explains Campos

 3.        Capacity for execution

An entrepreneur doesn’t need to completely dominate the market but still needs sufficient knowledge for their business. “In practice, we evaluate their capacity for execution; looking at what has already been done can demonstrate if the team is functional or not,” explains Campos.

For Lacerda, this criteria is fundamental for angel investors. “What can the business become in the future? In relation to the entrepreneur, how sustainable is the team?”.

4.       Unified team

The type of relationship that the team members of the start-up have can demonstrate what the relationship between the investor and the entrepreneur will be like. “It’s a marriage; you can’t forget that the angel investor and entrepreneur have this kind of relationship. We try to evaluate the type of person that we are going to live with every day”.

 

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