š I've screened 1200+ pre-seed startups this year (invested in 15 so far) ā the key thing I look for
Hey there!Ā
If you already know me, you can easily skip the highlighted abstracts.Ā
For the newcomers:
First of all, welcome and thanks for paying attention to this post!
Iām Yura, Iāve spent about 4 years in VC, then about 4 years building startups, then came back to VC and currently work as Head of Scouting & Analytics at ULTRA.VC where we invest in and accelerate impact-driven startups. This August, Iām celebrating my first anniversary at ULTRA, bringing my total years in VC to 5.Ā
During these 5 years, Iāve screened thousands of startups, in the last year alone it was more than 1200, and 15 of them resulted in deals.
As a founder, no unicorn-scale successes but some early-stage achievements like:
- raised a bit less than $1M in funding;
- having one of my apps named Mobile App of the Year on Product Hunt.
I love pineapples š!
If you only have a minute, jump straight to the āIn a nutshellā section at the very end.
At ULTRA Iām basically responsible for always having great founders around to invest in and support.Ā
We invest at pre-seed, which usually means that there arenāt that many tangible things to support the investment decision.Ā
All teams are surrounded by uncertainty and challenges, many of which they canāt even predict, let alone control, pivots are almost inevitable, and everything can change quickly. What makes it even worse is that there is no universal path to success and if something works for one founder and one team, chances are it wonāt work for the others.
Does this mean that pre-seed investing is just a lottery wrapped up in some kind of seemingly intellectual speculation and prediction?
Well, yes and no.Ā
After screening thousands of startups and observing the journeys of hundreds of them, Iāve noticed a pretty common trait that most of the founders who can be considered more successful have.Ā
It is a strong intrinsic (maybe even irrational) desire to build their thing.Ā
Entrepreneurās journey is all about getting through various obstacles, taking punches and sometimes getting knocked down. So if you donāt have that intrinsic desire, chances are the final punch, the one when you say to yourself, āScrew it, Iām done,ā will come much sooner.
āOh, another VC folk telling me to work on something Iām passionate about,ā you might think.Ā
Yup, but Iāve always found that advice too generic to be really helpful. How the heck am I supposed to find a passion if nothing comes to my mind?
So Iāve tried to dig deeper and understand where this intrinsic desire comes from. And I think Iāve found two most powerful sources of such motivation.Ā
The first is a desire to solve a specific problem.
It usually comes from some kind of a trauma in the past, something that makes everything else, except making sure that fewer people will have to experience it, seem meaningless to a person.Ā
This is very powerful and yet not very common because, letās be honest, not so many of us have experienced such a condition. Quick test ā if you donāt think about solving a specific problem at least a couple of times a week, you simply do not have one. But if you do, you can turn that thinking into your superpower.
Does that mean that you shouldnāt start a company if you donāt have that kind of a trauma? Of course not.Ā
Here we come to the second powerful source of motivationā¦
ā¦a desire to hang out with a specific group of people.
Almost all of us, humans, are social animals (clichĆ©, but true). And we tend to like to be around people with certain characteristics ā be it age, interests, hobbies, occupation, some sort of worldview, etc.
Usually, entrepreneurial-minded people get to the point where they not only want to be around that group (or groups), but also want to raise their social status among them by providing some kind of value.Ā
Serving people you like to hang out with is also a superpower because you naturally spend more time and, whatās important, more quality time with them. It increases your chances of finding a real problem, coming up with an efficient solution, articulating value with the right messages, and basically learning a lot faster.Ā
Imagine doing dozens or hundreds of user interviews, not because itās your job and you HAVE to do it to figure something out, but because you actually WANT and LOVE to talk to these people. Ā
In a nutshell:
Most of the founders who can be considered more successful have a strong intrinsic (maybe even irrational) desire to build their thing.Ā
Iāve tried to dig deeper and understand where this intrinsic desire comes from. And I think that two most powerful sources of this motivation are:
A desire to solve a specific problem ā this usually comes from some kind of a trauma in the past;
A desire to hang out with a specific group of people ā this is a superpower because you naturally spend more quality time with the people you serve.
You can argue that there are many more sources of motivation, but I havenāt found any comparable to these two in terms of their impact. Money? There are many ways to earn big money that are much more predictable than building a startup. Love working with a specific technology? Great, but tech is a tool not a goal.Ā
Am I missing something? Head over to the comments and letās discuss!Ā
Thanks for reading,
Yura
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