8 Traits of Investable Founders and Teams

Investors don’t invest in ideas; they invest in people and teams. There are instances where an opportunity appears to be more attractive than a team, but these situations usually don’t end well. Ideas and supposed “opportunities” can quickly be tested and proven to be bad, while a good team can come up with millions of ideas to solve a single problem.

Our first product, the ONE App, was a strong idea with a lot of promise, but we knew there were a lot of challenges to overcome before we could expect widespread adoption. Our investors, including our first investor, who was an early member of the “Paypal Mafia,” knew this as well, but believed in our team. He supported us when, like Paypal (which iterated from sending payments to and from PDAs to offering payment solutions for eBay), we shifted focus after launching our initial product.

During one of our many iterations on our original idea for ONE, we created the After School App, and found an instant fit with high school students. The app is now being used by millions of teens. We still have a ways to go, but the ability of our team to adapt and iterate our product allowed allowed us to create a better product, and gave investors trust in our long-term potential.

Here are eight traits of investable teams and founders:

• Diverse Team and Skills

Diversity is vital for a startup. For example, you wouldn’t want to start a mobile app company with five marketers and no developers. Investors want skilled teams with people who excel in a variety of areas.

Don’t be one-dimensional. Recruit diverse people to fill in the parts of your business that you aren’t good or experienced in. For example, our team has developers, designers, community managers, writers, a social responsibility expert, and additional customer service experts, all who have had different experiences and businesses in the past that bring value to our team. We also bring in interns (ranging from high school students to graduate students) to help us with different projects.

• Experience Where it Matters

If you want to open up a chain of burger restaurants but you’ve been an accountant for the past ten years, you’ll have a hard time earning the trust of a group of investors. You may be able to create kick-ass pro formas and balance sheets, but without experience in franchising or operating a brick and mortar business, you will be approaching investors waving a red flag.

Recruiting a co-founder or key employee who has experience and knowledge in this area will help build the credibility of your team and help you get the attention and respect of investors.

The same can be said for young entrepreneurs looking to launch a business around a mobile app. If you don’t have experience in the platform that will be the foundation of your business (iOS, Android, etc.), you’d better recruit someone who has that experience.

• Leadership

Every successful startup has a strong leader. A leader is someone who gathers and inspires people to do things. An investor group has to be confident in your ability to lead in order to trust your ability to grow a company. If you don’t have experience, be ready to explain to them how you plan on going about leading your team, and also surround yourself with mentors and advisors who can help you.

Maybe you haven’t led a team within a startup, but you’ve been the captain of a sports team, extracurricular club, or planned and executed an event on your school’s campus. This type of experience along with your plan and vision for the business will help investors see you as more than just another young entrepreneur with an idea.

• Culture of Continuous Learning

Have you ever worked with someone who thinks that they know it all and won’t listen to anyone else? It’s not enjoyable, and it’s not productive. You have to be able to take advice, change when needed, and grow as an entrepreneur and leader in order to have investors and to be a leader worth following. If you can’t grow yourself, how do you plan to grow a business?

• Traction

Ideas are worthless on their own, but ideas with traction aren’t. If you’ve been sitting on an idea for a year and haven’t done anything with it, why would an investor believe that you’re going to do anything different once they give you money?

There are thousands of ways to grow your idea and gain early traction. For After School, we simply went into high schools and talked with students and did product demos for them. This helped us gain an audience quickly without spending a large amount of our funds on marketing. Do as much as you can without investment to show investors that you’ll do even more with their money, and do so responsibly.

• Recruiting Savvy

One of our investors, Naval Ravikant, once asked us: “Can you fire good people to make room for great people?”

When seeking funding, expect investors to scrutinize your team and your ability to recruit others to follow you and help grow your company. You don’t have to be the smartest or most innovative person in the world to build a large and impactful business, but you do have to have a knack for identifying and recruiting talent. You also have to know who is not a good fit for your company.

• A Strong Network

Similar to how a strong team can make up for areas you’re not extremely strong in, a deep and diverse network can help accelerate your growth and your company’s. Years before we started what’s now After School, I began reaching out to entrepreneurs I admired to interview them and see what it was that made them unique and successful.

Building a network is not just getting well-known people to know your name — it’s building a relationship with them — one that is beneficial to the both of you.

• Enough Passion to Drive Action

Too many young entrepreneurs get into business just because they want to start a company. When times get tough, they move on to a different idea instead of grinding it out. You should be passionate about the problem your business is solving.

In the book “In The Company of Giants,” Steve Jobs said the following: “You’ve got to be passionate about something. You shouldn’t start a company because you want to start a company. Almost every company I know of got started because nobody else believed in the idea and the last resort was to start the company.”

Investors want to invest in entrepreneurs who are too passionate to give up; so determined that they can and will achieve what others can’t.

Post originally published on LinkedIn.