Finding a top 20% VC investor

I posted recently about why 70-80% of VCs harm their investments – even though it is in their best interest to see the firms succeed.

Of course, now would be a good time for a post describing how to find a great VC: that top 20%. And I found a post that says it so well that I almost don’t need to write it myself.

Here’s what Mark Suster, an entrepreneur turned venture capitalist, has to say about picking a good VC for yourself.

As he says, it’s hard.

  • do a lot of reference checks: you would do them for a new hire, they’re doubly important for a VC (and if one wants to invest, others probably will also)
  • look first for character: what sort of person they are and what they do with the companies in their portfolio that haven’t succeeded
  • emotional intelligence (EQ) matters more than IQ: you really want to know how they are at handling the inevitable struggles that happen between founders
  • industry knowledge helps, so they understand what matters in your business
  • more important is someone who knows how to give advice, and then “STFU and let you get on with things”

I don’t have a lot to add to this list. Just read his post. He knows a lot more about venture capitalists and venture capital deals than I do. I’ve just been in one. He’s been in many.