September 3, 2009
Ten Characteristics of Great Investors
Fred had a great post today called Ten Characteristics of Great Companies. This link includes the comments, which numbered over 70 when I last looked. Great discussion overall, especially for Fred’s having come up with the list on a 15-minute subway ride. Fred used to write a series of posts about VC Chiches, and I would periodically write a Counter-Chiche post from the entrepreneur’s perspective. This post inspired me to do the same.
So I’ve taken 15 minutes here, pretended I’m on the subway, and here is my list of Ten Characteristics of Great Investors, in no particular order:
- Great investors know how to give strategic advice without being in the operating weeds of a company
- Great investors get to know whole management teams, not just CEOs — in fact, great investors become part of the extended management team of their portfolio companies
- Great investors invite you to do diligence on them by giving you a list of every CEO they’ve ever worked with and asking you to pick the ones you want to talk to
- Great investors ask great questions
- Great investors don’t publicly take credit for the success of their investments, even if they were major drivers of that success
- Great investors show up for meetings on time and don’t spend the meeting using their smartphone
- Great investors treat their portfolio companies’ money as if it were their own money when spending it on things like lawyers or travel
- Great investors look for connections to make between their portfolio companies or relevant people but have a strong relevance filter and don’t send junk
- Great investors never have a ready-made list of the ways they add value to companies — and they specifically never talk about the help they give in recruiting executives or making sales/bus dev introductions
- Great investors recognize when they have a conflict around a portfolio company and are clear to represent their separate points of view separately
I’m not sure I’ll be invited to present this anywhere, but there it is for discussion.