Scouring the world for EPIC Founders
As we grow the Founders Capital network, we have been buddying up to some of the best VCs in the business to try to glean what makes a “great” investment. Many of the leading early stage VCs across the globe say the main driver of their investment decision is the people they are backing.
I personally believe that people are core to venture capital no matter what stage you’re investing at, and won’t let anyone tell me differently.
Why is my perspective valid I hear you ask? Because I have been both a naive and lucky Founder and an experienced and unlucky founder (in that order). Now I’m a semi-seasoned angel ;)
When Founders Capital is making an investment, we’re backing the entrepreneur - whether their last venture was a failure, success, or something in between. We believe in taking a radical approach and one that may be difficult for many VCs to stomach:
EPIC founders are EPIC founders, irrespective of how many times they’ve stepped up to the plate.
When Founders Capital backs a Founder, we trust them to “figure it out”. They might not win the first time, or the second, or the third - but we believe they have what it takes to get there eventually. Over the past 12 months, Hugo and I have made 20 personal angel investments, 4 of those are in Founders we backed previously.
Founding teams need to be EPIC. We don’t even progress to due diligence if the Founding team don’t pass the EPIC test, let alone invest. Since Founders Capital has grown, we often get asked what exactly this means - so I thought it would be worth giving you an overview:
What is EPIC?
Entrepreneurial
Passionate
Incisive
Credible
Entrepreneurial
On the face of it the word ‘entrepreneur’ comes with the territory of being a start-up founder - we get it. But, if you peel back the layers, we believe it’s based on 4 key attributes.
Humility and self-awareness
Founders that make sound decisions and are able to build world-class teams acknowledge their limitations, admit when they’re wrong, and are open to learning from others.
Customer orientation
In order to build products that resonate in the market, Founders need to be deeply attuned to the unique challenges and needs of their customers. Those that genuinely care and consistently seek feedback from their customer base are rewarded with unwavering relationships and, ultimately, business success.
Highly adaptable and future orientated
These Founders can pivot when necessary, respond to market shifts, and continuously refine their strategy.
Risk-taker and not afraid of failure
This forms the bedrock of entrepreneurial success. Starting a company has been likened to eating glass while staring into the abyss. You need to have a high pain threshold, be able to take risks and not be afraid of failure. These failures must be viewed as opportunities to learn, grow, and iterate. This enables Founders to connect with their audience and build innovative, indomitable solutions.
Passionate
When I initially engage with a Founder regarding their business, I want them to bring me to the edge of my seat with excitement. Within just 10 minutes, I want to have grasped the “why” for their unwavering commitment in this specific business, the profound personal significance it holds for them, and the impact it has on their cherished customer base. Based on my experience, passion fuels the motivation to overcome obstacles, persist through challenges, and continuously strive for success (having some kind of chip on their shoulder also helps immeasurably!)
Assessing a founder's passion requires keen observation of their energy, ability to articulate their vision, and commitment to personal and professional growth. By identifying passionate founders, investors can align themselves with individuals who possess the drive and dedication needed to build successful and impactful ventures.
Incisive
Incisive founders possess a keen ability to quickly synthesise complex issues, identify key risks and make sound, often bold, decisions. They are known for being exceptionally discerning, perceptive and focused - often cutting through ambiguity and distractions to enable them to lead with confidence and purpose.
One controversial yet pertinent example is that of Travis Kalanick, the co-founder and former CEO of Uber. Kalanick's leadership, although contentious, drove Uber to challenge the status quo and revolutionise urban mobility. His unapologetic approach to competition and unwavering determination has been fundamental to building Uber into a global ride-sharing powerhouse.
These leaders not only shape their own companies, but forge an indelible mark on the world.
Credible
Establishing credibility makes the difference between gaining the trust of customers, attracting world-beating talent, securing investment, and failure.
The culmination of personal attributes, skills and industry exposure, or “founder-market fit”, is critical. It lends you the deep insights, knowledge and understanding necessary to navigate the nuances of your chosen market. Once earned, the Founding team must consistently follow through on their commitments, provide value, and be transparent, honest, and accountable for their actions.
The bottom line…
Before stress testing business ideas, and deep diving into due diligence we use the EPIC framework to determine whether Founders fit the ‘mould’ for one of our investments from the outset. As we all know, there are a plethora of opportunities out there - this is our way of ‘scientifically’ whittling down the potential investment opportunities we look at for our members.
Until next week!
Cheers,
Rich & the Founders Capital team
