By Bret Fredrickson
The Best Entrepreneurs Are A Little Bit Naughty

When I moved to San Diego two years ago I was amazed by the city’s entrepreneurial spirit. Last week at our first Startup Grind San Diego event, I was even more so. Over 50 guests showed up to hear Greg Horowitt speak about his book The Rainforest, the success factors of Silicon Valley, and how San Diego and other markets can replicate the ecosystem that exists there.

His fireside chat showcased why he is so influential in this community as both an entrepreneur and a venture capitalist, so naturally we had to ask him what investors are looking for in a startup. It turns out they are looking just as much at the entrepreneur as they are at the opportunity.

Investors simply aren’t going to fall in love with an opportunity if the team or the people are no good. VC’s want people who are “a little bit naughty,” said Horowitt, “entrepreneurs who know the rules, but bend them just enough.” He went on to say that you never want to play it safe and go straight down the middle of the road – “For venture capitalists, that’s not where we make the big money. It’s all at the edges.”

Horowitt believes that “investors know within 10 minutes of talking to an entrepreneur whether they have that ‘It’ factor.” He pointed out that a person’s perseverance tells all. Investors are trying to answer questions like: Does this person have what it takes? Are they teachable? Are they driven enough to work through the obstacles that every startup is bound to face.

An entrepreneur’s imagination and creativity are also crucial in the eyes of an investor. Horowitt noted that no business plan has ever survived first contact with the customer, so they look for individuals who are going to be able to steer the company in a direction that makes sense, even if it veers from the original plan. “I’ve never seen a company execute on the business plan that they’ve written,” he said. “Companies tend to pivot 2-3 times in order to become successful.”

Companies that are successful are driven by entrepreneurs who are willing to listen. VC’s look for this trait and want to see that the entrepreneurs they are investing in are coachable, willing to learn, and can stretch themselves in order to see things through.

All in all it was a very uplifting evening spent in good company. Startup Grind San Diego is extremely grateful to CommNexus for allowing them to use their super fresh, tech incubator – EvoNexus – as their venue. Startup Grind San Diego and EvoNexus look forward to working together on future events.