I am constantly speaking with entrepreneurs, and they all seem to share the same obstacle: securing funding. Sometimes, bootstrapping isn’t a viable option and traditional lenders won’t approve a business loan, resulting in the need for venture capital (VC) money.
Reality check: Less than one percent of U.S. companies have raised capital from VCs. VC money is essentially unicorn money.
I have been fortunate enough to interact with a few VCs over the past several years. One of those venture capitalists is Burak Başel, of Başel Holdings. Its newest project, JuiceBot, is a San Francisco-based distribution system that eliminates plastic bottle pre-packaging to shield raw, cold pressed juice from light and heat oxidation. I asked Başel to lay out the important factors he looks for before investing, which are below.
1. Character of the business partners
The people behind an idea or company and, more importantly, their character is extremely important. You could have the best idea in the world, but it might never get off the ground with the wrong team in place.
“Their reliability, honesty, potential for a long-term relationship and work ethic all come into play. A team who understands their roles and performs them with love and enthusiasm is very hard to beat. I have to feel completely confident in the abilities as well as the character of the team before investing,” says Başel.
2. Capacity of the business partners
You can’t just fill startup roles for the sake of creating a team and launching. You need to make sure each person is highly qualified and possesses the ability to take the business to the next level. For example, a CFO with limited financial experience is a disaster waiting to happen, while a CMO with limited marketing experience is a severe handicap.
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