3 types of startup founders you meet in investor summits

For 2nd consecutive time, I got to attend arctic15 2019 — a prominent Helsinki startup event in Nordics that take place every springtime. That intrigued me to do some interesting analysis & reflection of founders’ persona.

During lifetime, I have spoken with at least 100 founders regarding their product offerings & startup story. And I have witnessed them pitching to their investors.

Here is what I have found:

The way founders demonstrate their products is far more interesting than the product they are pitching for.

I was able to classify 3 stereotypes of founders:

Alpha male founders:

Brag is their weapon to win over investors. They dress up in black turtlenecks to imitate their idols, often building an aura of authority around them. They are often surrounded by their admirers. Admirers are required, because their hollowness produces echo, effectively increasing the founders’ word clout.

And all of it is fine. Because investors too seem to be looking for this trait — passion (mostly, misunderstood aggression / obsession) to grow something beyond belief. Every investor secretly wish to have met the one (read unicorn founder )— someone that could validate their lifetime wisdom of investment, and compensate for those 39 odd million dollar money pits.

That brag brings inevitable problems, when:

• It is not backed by concrete data e.g. we are building airbnb of public toilets without any explanation on how the business model will really work
• It is backed by powerpoint presentations that establish that connecting two rectangular blocks with animation can create life on Pluto.
• It is backed by data that represent vanity e.g. At the present growth rate, we shall hit NASDAQ in 6 months — we shall be the first company to do that in sector X. While this enthusiasm maybe good to motivate the team, it completely overshadows factors beyond their control that prevent them from doing so.
• It will, definitely at some point, drive away potential partners / customers / glorifiers. Alpha male founders often forget that their counterparts are not always their competitors. In pitching events, competitive atmosphere often pits founders against each other. Egos build walls that no one is willing to break later. It sometimes takes very suave truce-maker who take up the beating from both sides. Corollary: Such suave truce-makers are found in fiction only.
• It is manifested in mundane, unintended actions: Unmistakably singing your brand jingle when other founders are present, not offering your business card to an interested non-investor entity, or sounding too cold to questions despite the ice had been broken previously. However rational, even a simplest sign of haughtiness drives people away. Those being driven away may often be crucial reagents in creating network effect that every growth based startups crave for.

Nerdy, Indifferent Founders:

This is founders’ ego revisited, but not-so-loud. They scratch their beards in Q & As. Participating in a group discussion, they are often found chewing endlessly as if the audience is pitching to them, and they simply don’t care.

These founders often think of themselves as inventors sitting on 1000+ patents. It could be true — they might be 21st century Edison with patent office hard drives titled with their initials. But it shows up so loudly in their facial expressions that the observer often prays it is complete fallacy. When asked about validity of their brilliant idea, they wave it off as if the world is going to end tomorrow, and all of this will be vain. So why get pissed over the details where the devil lies?

And this might have nothing to do with their energy levels. Their indifference shows up even after fresh cup of coffee.

It also doesn’t matter if someone introduces himself as an investor. It takes an investor some grueling Q & A session with a more forthcoming cofounder to get the answers out, when they gamely scratch their beard. They are often found with no documentation, and you will be lucky if they suggest follow-up emails / phone calls to get back with the necessary information.

Their sole reasoning for this indifference is their hold on the supreme key: science / technology / idea. Businesses must always bow to them no matter how fast competitors are pitching.

Oftentimes, they are wrong, but no one tells them that.

Checkbox Founders:

Founders who check all the boxes with smiles. Always fresh out of college, they make their surroundings feel light. All smiles, no suits and ties — they are often found opening the champaign bottles for the entire team. No brag. Chitchat with janitors. End of status quo.

(I see you are forming an image of someone — go on. You are free to do it.)

Underlying that cool persona, however, lies some deep treachery. They demonstrate only their best, and the most radiant persona to power-holders (investors — most of the time). When they are not at their best, they duck out of the confrontations. And even resolutions.

If growth rates don’t match the expectations, stop answering calls. Not until numbers are achieved, but until another investor is brought in. Not that they are always successful, but this remains their approach — feigning indifference with acerbic reaction.

When confronted, they rarely confront. Instead, they smile and say “Yes, I fully agree.” They may achieve what is asked of them, but never answer to the one who deserves the answer in the first place. They grasp the message but always shoot the messenger. The messenger is deceived despite his / her pivotal investment (of money / efforts).

If successful, their biographies glorify this as some sort of uncompromising ambition personified. What a life.

Ideal one — a wildcard entry:

Founders who simply present facts unassumingly. They smile like they are meeting another human being — irrespective of their power status. They are sincere when presenting the underlying complexity. And lighthearted for the sake of being lighthearted, without any baggage to reveal their humorous side. You know it seeing the twitch of their mouth — that natural looking curve.

Investors who get to work with them are quite lucky, without realizing it. Because rational ones rarely make into legends of books and movies.

After all, a startup must seem like a combustion engine that requires lot of energy. If the engine isn’t fuming, where is the energy being produced? No silencer? Completely fine! That rust looks sexy.

Electric vehicles aren’t mainstream yet in founders’ persona. Even though we fund those who pitch them all the time.

True leaders are found only in museums — and those museums today exist in linkedIn influencers’s posts. Leaders are defined by those who continually work for / with them. And published opinions of colleagues are often biased / clouded by the intention of the publisher.

Masses have luxury of judging a leader over time, but a team doesn’t enjoy this luxury. That team comprises of everyone — investors, partners, suppliers and employees.

But a founder is always classifiable through the above traits — no matter how small the judgement timeframe is. Experts in human behavior might come up with more types, but they are simply result of mutations in basic DNA structure defined above.

Caveat: Evaluation of people traits do not fully define a startup for investment / work commitment purpose.

History has been continually shaped (and written) by people branded as ruthless / irrational / cunning / arrogant — according to yardsticks that also varies with demographies and eras.

These traits simply show what to expect from founders, and how to go after, or completely avoid, what is to come.