When you score as much as the Seahawks did in the Super Bowl, the way people refer to you starts to change. They call you things like “dominant,” “effective,” and “the best.”
Elevate Ventures has been called many of those things.
That’s why I was so excited to hear what Elevate Ventures’ Vice President of Investments, Ting Gootee, had to say about what she considers when evaluating deals–and what startup founders should know about how Investors approach deals–on one of our recent Investor Panels.
Startup Investor Insights: Elevate Ventures’ Ting Gootee
Not All Money Is Created Equal
If Firm A agrees to the same terms as Firm B, why would their investments be any different?
Because, as Gootee pointed out, not all investors bring the same resources, network, and commitment level to the table.
“Look at it as a partnership,” Gootee urged founders. “When you take money from someone, they are in this with you for a reasonably long time.” Startup funding is not marriage, but the investor panel agreed: it’s close.
As with any relationship, Gootee said, you’ll want to look for three Cs when evaluating your potential investors.
The Three Cs of a Healthy Investor-Startup Relationship:
Competence. Do your due diligence on your investors. You can bet they’ll be doing theirs on you.
Character. You’ll depend on
Chemistry. Are your goals aligned well, or is it more of a loose fit? You’ll want your investors to be in lock-step with your goals so you can leverage your relationship with them effectively.
“Know that you are in this for the long term, and know that there will be bumps in the road,” said Gootee. But, as she illustrated, if you have kept the Three Cs in the front of your mind as you secure funding, you’ll encounter those bumps in the road with the confidence that all parties involved want the same result.
What Makes Investors want to Invest?
As Gootee pointed out, you should not ignore the human side of the investor-startup relationship. And her investment team at Elevate certainly doesn’t.
Gootee looks for “Someone that is comfortable managing the human side of business. As early stage as they are, there is a lot of subjectivity in finding the right fit.”
The second thing Gootee and her team at Elevate Ventures look for in a founder is leadership. But, as Ting so rightly asked, “What does that mean?”
When she evaluates a founder, Gootee wants to see servant leadership. “It’s not just about you, as the founder,” Gootee said. “It’s about the resources you can bring to your team.” That, Gootee said, is how companies can really grow and scale.
Gootee’s fellow panelist, Gerry Hayes of Slane Capital, agreed with Gootee and explained that the difference between a founder and a CEO can mean the difference between whether or not an investment will be made.
Both investors concur that the founder may not be the person to scale the startup–which really gets at a key insight I got from this panel:
- When they’re evaluating founders, investors want to see someone who is willing to acknowledge that, although they built “their baby” until a certain point, in order for it to grow bigger than themselves, they may need to assume new, different roles. Be humble.