What do the top early-stage start-ups have in common?
Here are some of the winning qualities that catch our attention, and our internal dialogue as we evaluate investment opportunities:
The founder(s):
👉BIG visionary: do they have a unique way of viewing the problem they’re solving that others don’t? Is it a big problem worth solving?
👉Talent magnet: have they attracted the strong, A+ team needed to successfully build?
👉Mindset to win: have they demonstrated the ability to prevail over any challenge?
👉Velocity and execution ability: do they execute to achieve clear goals that clearly map to the overall vision? Do they have a sense of urgency and the execution abilities to tackle each goal? Have they demonstrated this?
👉Decision-making abilities: are they able to make hard decisions for the benefit of the company? Do their decisions reinforce a winning strategy?
👉Customer-centric approach: Do the founders prioritize understanding and addressing the unique needs, challenges, and experiences of the target customer? Has there been extensive customer discovery conducted?
The opportunity:
👉Significant commercial opportunity: are there evident tailwinds, a large market opportunity, and a whitespace for the company to lead? Is now the right time? Do the customers recognize there is a problem and want a solution?
👉Strong value proposition: have they mapped the customer pain points to clear and compelling solution(s)? Are these pain points needs vs. wants? Is the approach the best solution to the problem?  Is the value proposition quantified and clear?
👉Customer pull: do they have unique access to their customers that others don’t? Can they attract paying customers through organic means? Does it feel like an effortless “pull” to get target customers? Is their traction replicable?
👉Differentiated & defensible: is the opportunity N of 1? Is there enough of a moat to make it implausible to copy? Will it take another company significant time and resources to replicate?
In the fast-paced and competitive world of start-ups, a winning recipe requires a combination of edges.
This is by design of the problem and opportunity selected, as well as the founders’ own magic.
Not all of these elements need to come together to move forward with an investment. In fact, rarely are all of these factors clearly demonstrated at the earliest stages.
Each of these “edges” contributes its own compounding moat and advantage that drives the probability for success, and hence the overall attractiveness of an investment for an investor.
