Trait 1: Exceptional Skill Set

One of the most enlightening experiences during my time as an Entrepreneur in Residence at a San Francisco-based venture capital firm was realizing that various investment opportunities compete not only within their sector but also against other industries. For instance, your fintech startup may be vying for funds alongside an artificial intelligence venture.

This highlights the necessity for excellence; only the top candidates secure funding. Throughout the investment process, you will be constantly assessed.

Trait 2: Approachability

Investors often consider, "How will it be to collaborate with this individual over the next seven to ten years?" This leads to the question: Are you pleasant to work with, or do you come across as difficult? Being "easy to work with" does not imply that you should be a pushover; rather, it indicates that you are assertive and in charge while being transparent and honest with your investors.

Your aim should be to be the investment that causes minimal concerns for them.

Trait 3: Realistic Equity Expectations

Understanding that investors need to earn a profit is crucial. For example, if you're raising a $5 million funding round but only willing to offer 5% equity, that’s unrealistic. Stubbornness in negotiations will only drive investors to consider other opportunities.

Furthermore, if your equity split with co-founders is heavily skewed—say, 90% to you and 10% to them—investors might question their motivation and capability. Striving for a fair equity distribution is key to attracting investment.

Trait 4: Aligned Outcome Expectations

When I mention "results," I refer to the eventual exit strategy for your startup. For example, if you aim to sell your company for $100 million while raising $10 million in funding, that would mean a post-money valuation of $50 million, resulting in a return of only 2X for investors. However, they typically seek returns of at least 10X.

Your expectations must align with those of your investors, who might be aiming for a 30X return at an early stage.

Trait 5: Openness to Liquidity Events

If you are uncomfortable with the possibility of selling your company, it’s best to bootstrap rather than seek outside funding. As the CEO, you will play a significant role in guiding your company's future, but remember that investors also need to see returns, which may necessitate an eventual sale.

Trait 6: Readiness and Preparation

Considering the 100-to-1 funding ratio, you must be prepared for meetings with numerous investors. You never know which meeting will result in securing funding, so being well-prepared is essential.

Trait 7: Effective Communication

Clarity and brevity are vital when pitching to investors. If asked about your monthly revenue, respond succinctly with the exact figure instead of providing an elaborate, convoluted explanation. Practice is crucial; even the best presenters rehearse extensively to ensure clarity.

Trait 8: Passionate Commitment

A deep-seated passion for your company's mission is crucial. This enthusiasm can help you and your team navigate the inevitable challenges. Investors also look for signs of your dedication, which doesn’t require you to be overly boisterous but should reflect genuine belief in your venture.

Trait 9: Talent Attraction

As a startup CEO, your dual responsibilities are to "Recruit, recruit, recruit," and "Sell, sell, sell." Investors are betting on your ability to attract top talent. Whether it's your co-founders or your executive team, their caliber plays a significant role in investor confidence.

Trait 10: Integrity

Integrity builds trust with investors. If they sense any dishonesty, they will hesitate to invest. Address potential issues head-on to maintain transparency. For instance, I once overlooked a perception that I was difficult to work with, which ultimately led to lost investment opportunities.

Being upfront about challenges can foster trust and strengthen your relationship with investors.