Venture Capitalists Bet On Management

From an article in Venture’s Capital Club Monthly

A survey of the investment criteria used by 100 professional venture capital firms revealed that the entrepreneurs’ "capability for sustained intense effort" was the most important of the 24 factors listed in the survey questionnaire. The survey . . . asked 100 venture capital firms to rank on a scale of 1 to 4 the factors they considered before investing in venture proposals. Ranking just after "capability for sustained intense effort" was "thorough familiarity with the market targeted by the venture" and "demonstrated leadership ability in the past." At the bottom of the ranking were "the venture will create a new market" and "I will not participate in later rounds of investment."

Here is a list of the 10 criteria most frequently rated essential by the survey respondents:

Item	Percent
Capable of sustained intense effort	64
Thoroughly familiar with market	62
At least ten times return in 5 to 10 years	50
Demonstrated leadership in the past	50
Evaluates and reacts to risk well	48
Investment can be made liquid	44
Significant market growth	43
Track record relevant to venture	37
Articulates venture well	31
Proprietary protection	29

The failure to satisfy these criteria in most cases means the venture is "disqualified" for investment.