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When trying to get investors for your startup, you need to present a great idea.
But potentially even more important is how you present yourself as a leader.
Martin Zwilling recently wrote about this investing concept for Forbes, saying:
“As an Angel investor in early stage startups, I’ve long noticed my peers’ apparent bias toward the strength and character of the founding entrepreneurs, often overriding a strong solution to a painful problem with a big opportunity. In other words, the entrepreneur quality is more important than the idea.”
The thought behind this is that a great entrepreneur has a better chance of making a decent idea work than a mediocre entrepreneur has of making a great idea work. Whether you believe this thought process is actually true or not, it can certainly have an impact on your odds of finding investors.
And as it turns out, that investing philosophy might actually hold some weight. In his article, Zwilling cited research by leadership consultant Fred Kiel, who found a link between leaders who received high scores for character and the success of their businesses.
Kiel identified eight common traits that CEOs with high character rankings had in common. These are traits you may seek to emulate when trying to attract investors, as well as throughout the process of running a successful business. They include:
- High moral principals: Leaders should have integrity, responsibility, forgiveness and compassion.
- A worldview of positive beliefs: More effective leaders tend to see and express things in a more positive light than their pessimistic counterparts.
- Mental complexity: Those with cognitive complexity tend to notice subtle differences and even challenge their own ideas.
- An openness to critical feedback: High scoring leaders tend to seek out and listen to critical feedback from others, which can help them make better business decisions.
- An enjoyment of time spent with mentors: Similarly, seeking the advice of one or more mentors can be invaluable even to those at the CEO level.
- Self-determination: Leaders with this quality tend to continually work toward improving their skills and thus their business.
- An understanding of their life story: Those who have a clear perception of their life story tend to have a better understanding of the events that influence and shape their development.
- An acceptance of support from others since childhood: Those who have sought and accepted help from others, including parents, teachers and peers, since childhood are more likely to feel accepted and respected. They are also more likely to be able to pass on those same lessons to others.
Lion and Lioness Photo via Shutterstock
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Aira Bongco
While people may think that businesses are all about cut-throat competition, it is still very important to stick to your morals. That’s how you get real business done and fully satisfy your customers.
Annie Pilon
That’s a good point!
It’s not surprising that investors zero in on the quality of the team. After all, investors rely on the team to deliver value for ALL shareholders. This is why focusing on a good team is more important than on an idea that may be ‘better’ but which is pitched by a weaker team. It’s in the execution where the returns are made.
The majority of your points lean towards backing a team that is high in Emotional Quotient (EQ). An article in Entrepreneur.com explained “Why You Need Emotional Intelligence To Succeed In Business”.
The one other quality of note is persistence which is slightly different to self-determination. Persistence is action in the face of recurrent bad news. As an entrepreneur you can have days, weeks or even months of bad news before there is light at the end of the tunnel. Holding firm and doing what you need to do will give investors confidence that you are deserving of their money.