4 key traits this Silicon Valley VC looks for in founders

Every year, millions of businesses are created around the world. To turn these great ideas into success Start-up companymost of them will inevitably encounter fundraising challenges.

While there is no magic formula, there are some variables Founder This can be honed when approaching potential investors. TNW sat down with Letizia Royo-Villanova, an early investor in San Francisco-based VC Plug and Play Red Bull Basement Global Finals held in Tokyo to gain her insights.

One thing that really needs to stand out, according to Royo-Villanova, is the drive and authenticity of the founders. “Maybe they’ve experienced a problem or know someone who’s experienced it, so they really want to solve it. Not because of the money — which is certainly a plus — but because they truly care about solving the problem.

In addition to the passion mentioned above, the ability to sell is a key skill. Founders are constantly asked to pitch their ideas to investors, customers, and talent. “The best founders will have the best talent on their team,” Royo-Villanova said.

While direct industry experience is valuable, it’s not always necessary. “There are some great entrepreneurs who don’t necessarily have this experience. They have a natural drive to start a company.

However, understanding customers and the market is non-negotiable: “You really need to understand the pain points and the industry. This will help open more doors in the future.

In the end, personality and rapport are important. “I do think you can feel it in the first half hour,” Royo-Villanova said, referring to the idea of ​​knowing whether the founder is someone the VC wants to spend time with. “If you end up investing in a founder, you’re going to have a lot of meetings with that person. So if you don’t get that vibe, you’re not going to want to invest in them.

Common Mistakes Founders Make When Selling

While founders may have the best idea imaginable, creating an impactful pitch is crucial in order to attract investor participation. (Not everyone is lucky enough to survive a disastrous pitch like Nvidia co-founder Jensen Huang. In 1993, he awarded Sequoia Capital to Don Valentine.)

Royo-Villanova believes one of the most common mistakes is that founders spend too much time describing the general problem rather than focusing on their specific solution. “If this is a climate or sustainability startup,” the venture capital explains, “and they spend 15 minutes talking about climate, I don’t need to hear it. They can tell me in a sentence or two. Then we can focus. to more important things.

While individual entrepreneurs are likely to be successful, venture capitalists are more likely to consider funding founder teams of two or more. “Building a startup is hard enough if you’re doing it by yourself, and what if you suddenly have a bad week or month? You need another person to support you,” she said. Additionally, teams with complementary skills are more likely to be successful in the future.

Common pitfalls for early-stage startups

Of course, beyond publicity, there’s the small issue of actually running a business. Specifically, when it comes to financing, Royo-Villanova believes a major mistake was taking money from any available investors without considering strategic adjustments.

“The money will run out, but the investor support will not,” she said. The right venture capitalist can provide assistance with recruitment, sales or industry networking.

Returning to the talent issue, recruitment decisions are a critical area of ​​business operations. Founders often try to save money by hiring cheaper talent, but Royo-Villanova said that can backfire. “It’s about finding the right fit for your company and building a culture from day one,” she said.

Finally, the inability to steer is another potentially fatal flaw. “If you have an idea, talk to potential customers from day one to understand if this is actually a problem, if they will prioritize it and be willing to pay for it, and if not, make adjustments. If you’re going to fail, Just fail as quickly as possible – it’s not even failure, it’s just replacing it with something else.

Focus on education and supportive regulation can drive European innovation

In light of concerns and recent discussions about the innovation gap between the US and Europe, we couldn’t help but ask the California-based venture capitalist what she sees as the most important areas holding back Europe’s growth.

She believes one of the main problems is the lack of early exposure to innovation and entrepreneurship. “I feel like I don’t know as much about the world of innovation or venture capital as some of the students in the United States,” said Royo-Villanova (Spain). “If you introduce a culture of innovation from a young age and explain its importance, it will help a lot in the future.”

Regulation and business attitudes also play a role. European businesses tend to exhibit a risk-averse mentality compared to the more dynamic and entrepreneurial cultures of their North American counterparts. In addition, complex regulatory frameworks can hinder the rapid expansion of new ventures – such as the recently launched EU company Hope it can be overcome.

Founders seeking to build successful new ventures need to embody passion, sales prowess, and customer insight while avoiding common pitfalls, including neglecting strategic financing and failing to pivot quickly. At the same time, Europe’s innovation ecosystem will benefit from early education, changing business attitudes and simplified regulations.

Addressing all these challenges together can create huge opportunities for European startups, creating a virtuous cycle of innovation and investment, Create more winners on the global stage.