Entrepreneur . . . 

is someone who accepts the many risks inherent in operating an enterprise in pursuit of profit. The term can apply to anyone who forsakes the relative security of a job for the challenge of building a successful company. Most entrepreneurs invest great amounts of time and effort, at considerable sacrifice to themselves and their families, for the privilege of starting their own business and being their own boss. Entrepreneurs come from all walks of life and have different degrees of experience and ability.

What do venture capitalists look for in an entrepreneur? What type of people do they like to invest in? Here are a few characteristics venture capitalists like to find in an entrepreneur:

• Achievement. Investors look to past experiences as a prime indicator of an entrepreneur’s prospects for success. Someone who has been successful in the past is more likely to be successful in the future. Obviously, the best achievement an entrepreneur can have is to have started a business in the same industry. Next to that, success and advancement in a large company are preferred.

• Knowledge. Knowledge of the industry and where the new product will fit is essential. An accurate study of the industry may give an entrepreneur this knowledge, but actual experience in it is a real plus. Knowledge about working with people and the ability to put together a good management team is important.

• Energy. A venture capitalist must be convinced of an entrepreneur’s ability and willingness to work hard to make the company a success. A tenacious entrepreneur with enthusiasm for his company is a must. Surveys show that entrepreneurs work long hours.

• Intelligence. What an investor looks for here is rationality, insight, and creativity. Advanced degrees from universities are nice and may evidence intelligence, but what a venture capitalist really wants is an entrepreneur who can analyze a complex problem, understand it, and arrive at an appropriate solution quickly.

• Flexibility. No one wants to invest in a blockhead! A flexible entrepreneur is one who can adjust his approach to meet unexpected problems. He is one who can accept criticism and advice from others, including his investors. Most important of all is the entrepreneur’s ability to learn from his mistakes and grow with the increasing demands of his expanding company.

• Management ability. A successful company’s management will be faced with personnel and management problems that would stretch the patience and creativity of the best of managers. A good manager must be able to work with and motivate his people. He must also keep a tight rein on cash flow, cash control, manufacturing, and sales.

• Integrity. Investors want an entrepreneur who is honest and open with them and with himself. This integrity includes an honest appraisal by the entrepreneur of his strengths and weaknesses as well as a realistic appraisal of his product and its prospects for success in the marketplace.

All entrepreneurs have faults. The more of these "ideal" characteristics an entrepreneur has, however, the more likely it is that his company will get funded. Investors consider these characteristics carefully when they evaluate business proposals. See: Commitment, Due Diligence, Ethics, Five Factors, Management Team.