What Do You Look For In An Investment?

What Do You Look For In An Investment?

Part of our mission at CAV Angels is to provide educational on early stage funding to both investors and entrepreneurs alike.  As such, we are thrilled to bring you a blog post from entrepreneur-turned-VC: Brett Brohl.

Brett started his early stage career in entrepreneurship as a multi-time founder leading both venture-backed and bootstrapped companies to successful exits.  He then went on to the TechStars accelerator first as an Entrepreneur-in-Residence and then as a Director.  Most recently, he opened The Syndicate Fund to invest in early startups.

A huge thank you to Brett for providing his perspective on:

 

What do you look for in a company?

Team, Team, Team. As an early stage investor nothing is more important.   So what makes a great team? Here are the 5 qualities I look for in a founding team. I originally created #’s 2-5 while building businesses as a checklist to evaluate potential hires. When I moved to the venture side of the table I was not surprised that they were just as important, it was just missing #1. When I meet new founders if they don’t check these boxes, they probably won’t get my check.

  1. Multiple Founders. I have built companies both on my own and with partners. Entrepreneurship is hard either way, but I can tell you from experience that having others along for the journey drastically improves your chance at success. Preferably you have complimentary skill-sets. The exception to this rule is a solo founder that has managed to hire early employees, with upside interest, that fill needed holes.
  2. Culture. No matter if you are hiring employees or investing in a company, culture matters. When you are investing in a company the culture question is actually two sided. First, is their internal company culture one that is sustainable. Second, does their culture fit the culture of investor.
  3. Willingness to Learn. Are the team members coach-able. If you aren’t willing to listen to advice you are destined to repeat the mistakes I, and many other entrepreneurs have made in the past. We want to help you! Additionally, there are inevitably skill sets your small team will not have, one way to alleviate this hurdle is to be willing to learn new skills.
  4. Ability to Learn. You can be willing all-day long. If you don’t have the ability to learn new skills or execute on advice, it is a mute point.
  5. Willingness to Work Hard. Entrepreneurship is hard (have I mentioned that?). One of my wife’s favorite stories about my entrepreneurial endeavors occurred about a year into my first sizable company. After one truly grueling stretch I in all seriousness told her “this is way more work than I thought it would be.” She just laughed at my naivety – she knew what it would take from the beginning! If founders expect to put 40 hours a week in they won’t last. There is too much to get done and my founders should want to spend every minute thinking about their business.
 
Brett Brohl is the founder and Manging Director of The Syndicate Fund. Additionally, Brett helps manage the Techstars Retail Accelerator and was the Director of the Techstars Startup-Next Food & Ag program. Prior to becoming an investor Brett was a multi-time founder leading both venture-backed and bootstrapped companies to successful exits. Brett can be reached on twitter @brettbrohl or via email brett@thesyndicatefund.com