How do funds choose companies that can survive anything?

Hours

During Pitch MeetUp the topic we debated with other investors in the venture capital market was: “Two years in, and what next: How do funds choose companies that can survive anything?”
It seems that there is no one-size-fits-all answer to this issue. A lot depends on the stage of the company’s development. We agreed that at an early stage, the perseverance of the founder is the most important factor determining the chances of surviving the first few years. However, when it comes to how to identify such a founder and how, as an investor, you can support them, there were as many answers as there were panel participants. These were not contradictory answers, but each person emphasized different aspects. Among the key takeaways, we can highlight:

  1. The founder’s self-awareness regarding the challenges ahead – the issue of the large gap between the cheerful facade in the media and the multitude of problems and stresses behind the scenes was emphasized.
  2. The founder’s preparation for the chosen path – aspects such as a financial cushion, sorted family matters, and people from their environment capable of understanding and offering support were highlighted.
  3. A sense of mission and fascination with the project being worked on, which allows the founder to continue when things get really tough.
  4. It’s better not to be a solo founder.
  5. The first few people who are part of the team are crucial. They must be supportive, not another problem to solve.
  6. As the company grows, the founder must gradually learn to delegate tasks and trust others.

This topic is very interesting and it seems that funds, on the one hand, say “we invest in people,” but on the other hand, they spend little time truly trying to understand them.