How an investor should look at an (young) entrepreneur?

Of course, the quality of the proposed investment idea and the quality of the ensuing due diligences are vital to evaluate the deal proposed by the innovator BUT above all, an investor invests in an individual, an entrepreneur!
Yet, an important due diligence part, the human side, is often not done or only partially.

We, all, ought to know that there are 3 important parts in the human side due-diligence to be done from a Business Angel or Venture Capitalist perspective:

1. That the chemistry factor is high between the investor and the entrepreneur. This means that they trust each other, they believe in each other, but even more importantly, they appreciate each other.

2. That the entrepreneur has a strong support from his/her close surrounding (family, friends, etc.), otherwise the bumpy road of launching a new venture might become even bumpier…

3. That the entrepreneur is really motivated to the success of the new venture and not just in search of a fantasy or a (first) great job…

About the last one, I often hear students to say that they are ready to sacrifice time (that they will be working for nothing). Although, time is the most expensive of all commodities, to offer to work for “free” is not a real show of motivation. It is undeniably a strong indicator but this is not just good enough nowadays. This is true, for many reasons but here are some:

- No investors would like to see the “investee” of an opportunity to be attracted by another more rewarding one.

- No investors would like the entrepreneur to burn the potential by lurching on other opportunity each time the entrepreneur has a change of situation (got diploma, got married, got a new child, got retired, etc.)

- It is common knowledge that most entrepreneurs work for very little at start (except the lucky ones working for well-funded start-ups) and thus making this kind of “sacrifice” quite a common place.

Of course students (poor by definition) cannot put much cash on the table but there are ways for them to raise their stake (and not necessarily cash wise).

A well-advised investor will require from the entrepreneur a more substantial motivation evidence. Something to be put on the deal table which would “really hurt” the entrepreneur in case of failure (something more than “Well… I lost one / two years of my life but I have learned greatly anyway!”)