Tech investors want to pick winning companies, and that starts with picking winning founders.
Three female investors—Anjula Acharia of Trinity Ventures, Leah Busque of FUEL Capital, and Nisha Dua of BBG Ventures—gathered at Fortune’s Most Powerful Women Next Gen Summit in Laguna Niguel, Calif. to outline the qualities that they look for in promising entrepreneurs.
Here’s what they said.
Founders who make a great first impression
“You’re always looking for a founder that has incredible conviction in what they’re solving yet has flexibility and an ability to pivot when they receive feedback,” Dua said. “They need some level of self-awareness.” Investors can hear it when founders chat with them or respond to feedback, she added. “You can tell a lot about a person in those first few meetings.”
Founders who tell a great story
Busque, who is also the founder of TaskRabbit, the on-demand labor marketplace, said storytelling matters. “Is this founder purpose-built for the opportunity? Can you look them in the eye and believe that they’re going to persist?” she asked. That’s why the story a founder tells matters. “Who is this person sitting across from me? Why are they here?”
Dua agreed: “In asking a person who they are, you’re really asking what they want that business to be in five, 10 years.”
Founders who check their ego at the door
“Raising money is like dating,” Acharia said. “You can never look desperate.”
Nor should you look defensive, Dua said. “Founders who get defensive when you ask them questions or give them unsolicited feedback…and people who try to hide things,” she said, listing founder no-nos. “Don’t put your revenue on page 60 in the appendix. Don’t deflect when you’re asked about it because you’re embarrassed. The investor wants to know how you’ve thought about the business.”
Founders who take the long view
Acharia said that it’s worth finding investors who are in it for the long run. “My biggest mentor is Jimmy Iovine,” she said. “A week after he gave me a really big check, he told me my business would fail. He said, ‘For me, founders are about albums, not singles.’ So when I look at a founder, I don’t just look for that one hit.”
She continued: “I’ve given personal checks to founders to people whom I didn’t even believe their business plan but I want to be in business with them. And to be quite frank, my business failed, and I went on to do more things with Jimmy that were successes. That belief he had in me is now something I have in others. It’s about being on a journey with a founder and taking that long-term view.”
Founders who are women
“We think it’s a competitive advantage to invest in female founders who are building a product for consumers who look like them,” Dua said. “Women are the dominant consumer. They drive 85% of purchasing decisions. They drive most social platforms. And we’re increasingly the early adopter. The changing profile of the founder—it’s no longer the Stanford hoodie. So we’re seeing this tidal wave of female founders.”
Busque agreed. “Investors always say they’re looking to pattern-match,” she said. “I didn’t match a pattern. It was a few people who took a chance on me.”
Founders who recognize that it’s not always about them
“I still feel like I’m behind enemy lines” as a founder turned investor, Busque said, “So I’ll say this: I’ve learned that there are thousands of reasons why an investor won’t invest in your company that have nothing to do with you.”
Founders who wear failure like a badge of honor
“Everybody’s struggling with something on the inside,” Acharia said. “The best founders are struggling with something.”