A number of investors will say that there's a key profile or specific traits that they look for when they're assessing founders. I'd argue that there is no "ideal founder profile” that dictates who will become a “successful founder.” While there are certain traits that become more relevant as the company grows, these could be viewed as skills, which can be learned and developed over time.

There are profiles that I find myself attracted to but considering the range of founders that I've worked with and have invested in over the years, I find it hard to argue that there is a definitive profile of a “successful founder.” Successful founders could come from anywhere and don’t need to have overlapping personality traits. What if you don’t fit the “ideal founder profile” that investors claim they are looking for? How do you prove to investors that you have what it takes to be successful?

In her book on Grit, Angela Duckworth found that individuals with high levels of "grit" were able to maintain determination and motivation over long periods despite experiences with failure and adversity. Grit is defined as "perseverance and passion for long-term goals." She argues that grit is a better predictor of achievement than IQ. This is a characteristic that I think about often when speaking to founders but even if it is present, it might not be enough. Grit is an internal measure that can be difficult to gauge qualitatively from conversations.

The examples covered in her research typically entail friendly environments where there is a defined path to achieve the stated goal (e.g. getting through school, the military, or a competition). Life is messier, entrepreneurship included, with multiple different paths that you could take to achieve the end goal. I'd argue that grit is a prerequisite but not enough for success in a competitive and dynamic environment. Successful entrepreneurs can take a number of different forms and come from a variety of backgrounds. So how do investors start to evaluate the other traits?

Signalling

There's often a fervour that follows founders that have attended certain schools, achieved certain qualifications, and worked at certain companies. Investors will zealously use these heuristics to determine whether they perceive that the founder has the ability to be successful.

The main aim of using a heuristic is to reduce the cognitive load of making a decision for an investor. This is just lazy. It's no different to saying "I'll invest if X invests," which is what a lot of investors will do as well. Further, using well known heuristics or credentials can be counterproductive because if they're well known then it's likely that candidates who don't have the necessary traits but understand the heuristics can mimic them.

If the cost of the credential isn't significant, e.g. If everyone you know is going to graduate school (there’s no FOMO associated with going yourself) and you have the social safety net to support you while you’re there (there’s a low financial cost as well), then this is arguably a low cost endeavour. In this situation, the value of that heuristic decreases as a signalling tool.

Credentialing is so often used by investors because there is a perception that the credentials obtained have come at a high cost. However, that isn't necessarily the case, which can lead to type 2 errors. Credentials are only important when there has been a significant sacrifice that has been given to achieve them. If you don’t have the “right credentials” and need to create your own credentials, I'd suggest that you should:

• Create your own test;

• Frame a narrative around that test; and

• Tell the story.

Create a test

One thing that constantly impresses me is when a founder has created a credential that sits outside of the known heuristics. They have created an "Excalibur test" for themselves and pulled the figurative sword from the stone. They have flexed their executive function to demonstrate that they have the skills to do something that's extraordinary and uncommon. This typically means they have gone deep and done something that someone who was less interested or who wanted to "hack" a problem wouldn't do. They've spent an inordinate amount of time thinking about and grappling with a problem that would seem mundane to someone outside of their field.

Frame the narrative

Then it's necessary to be able to frame that experience in terms of how it makes you the right person to tackle the current challenge i.e. demonstrate founder-market fit in the simplest possible terms. Why are you best placed to do what you're going to do? How did the Excalibur test prove that you are exceptional in the field that you're trying to tackle?

Tell the story

Then take all of the pieces and weave them together into an intricate tale, which captivates and inspires the listener. It doesn't need to be an epic but it does need to have a narrative arc (see the Hero's Journey for a story outline). You can't just do something and expect people to be impressed, you also need to tell them what you have done and why it's relevant. Using a story is the easiest way to disseminate that knowledge that you have acquired from your experiences.

For example, I met a couple of guys that were building a company in the Fintech space. They had previously built a Fintech business that was crippled by COVID. In that previous business, they had to work with the regulator for over a year to change the regulations so they were able to provide some core functionality. This is a pretty extreme example of the Excalibur test but demonstrates that the founders are committed to the Fintech space, are willing to stick with problems until they’re resolved, and aren’t afraid of tackling difficult challenges. There are few other people that would have tried to solve a problem like that independently.

Trajectory is far more important than the intercept. Credentials refer to single points in time. If you have enough credentials accumulated over time it begins to tell a story about your trajectory. However, if you don't have those points, you need to create your own to demonstrate that your trajectory doesn't match the heuristics currently held by investors.

Conclusion

As I mentioned at the beginning, it's difficult to have conviction about the credentials or traits that will make a founder successful because there are so many different backgrounds that could lead to someone becoming a successful founder. Any investor that tells you that they can understand who will be successful based on heuristics and social proof is cognitively truant.

If you want to go beyond the typical heuristics that investors are looking for, you can create your own test, frame it, and tell the story. This will likely impress and inspire more investors than a founder who has all of the right credentials because the outcome of the narrative is going to be different than what they'd expect.