My 4 year anniversary at Redpoint is fast approaching. Over the course of four years, I have had the privilege to meet in some form 3,000 companies. I’ve diligenced roughly 100 of those and Redpoint has invested in perhaps 20. I’ve worked with twelve investments as a board observer. I’ve been reflecting on what I would expect from an investor as an entrepreneur.

During the pitching and diligence

  • Timely communication and quick decisions. Honest, transparent and rational decision making.
  • Insightful or curious questions that demonstrate an understanding of the business or a desire to learn more about it.
  • Strong desire to get to work understanding the market through research, modeling and/or diligence calls.
  • Willingness to work his/her network to get insight that can be shared with the founder.
  • Eagerness to learn about the founding team: their journeys, their passion and goals.
  • Discretion.

During term sheet negotiation

As a board member

  • Passion for the business to help recruit, build the brand, raise more money, and speak to the press.
  • Willingness to work build his/her network to drive the business forward.
  • Honesty and straightforwardness. Civility and respect for other members of the board and team.
  • Decision making auditor. Someone willing to challenge the CEO.
  • A great listener and someone who asks questions before making recommendations. See Why Smart Executives Fail.
  • Openness for learning new models and ways of doing things. Willing to be wrong.
  • Patience. Long term vision and the stomach to bear ups and downs, inevitable in any company.

These are the principles I hope to live up to as an investor. They are the ones I would demand from my investor if I were a founder.

What are the characteristics that are most important to you?