What Investors Look for in the People They Back
Characteristics of People Who Investors Love to Allocate Capital To
Founders, fund managers and deal sponsors who want to improve how investors see them in meetings and ongoing relationships.
Quotes from the session
"It's the highest-quality person in the room investors want to work with, not the best, quote unquote, deal or the person promising the highest returns."
"First, above everything else, they want to work with a class act individual, because that encompasses so much. It means respect for yourself, it means respect for others."
"A lot of this comes back to trust, being able to relate to you, liking you and having high conviction that you're the right person to trust with their capital."
What you will hear
Investors want to work with the highest quality person in the room, not the person with the best deal or the highest promised returns. Richard C. Wilson shares this view after running 275 live events for the Family Office Club investor club over 17 years. He points to remarks from Warren Buffett and Sam, who both preferred to deal with people who are easy to work with.
He then lists the traits that ultra wealthy investors respond to. These include being a class act, showing passion, serving investors first, thinking long term, and having work ethic, grit and emotional intelligence. He adds that being pleasant matters, but a pushover does not win respect. Trust comes first, since a promised return is only a number on paper.
Facts and figures
- Richard C. Wilson has run 275 live events for the Family Office Club investor club.
- The Family Office Club has been running its investor club for 17 years.
- Seven heads of investor clubs took part in the panel discussion where Richard was asked this question.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Characteristics of People Who Investors Love to Allocate Capital To. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
5 key takeaways
- Quality of person beats the deal. Richard C. Richard says investors most want to work with the highest quality person in the room. They do not rank the best deal or the highest promised returns above that.
- Start by being a class act. He puts this above everything else. It covers respect for yourself and others, kindness, politeness and professionalism.
- Show real passion and enthusiasm. Investors want to back people who are excited about what they do. Richard cites Tim Draper, who goes into everything with gusto and enthusiasm, as an example.
- Serve investors and think long term. Traits he lists include letting investors eat first, a servant leader mindset, consistency and being long-term minded. Sam also wanted to work with someone again and again, not just once.
- Trust matters more than a promised return. Anyone can put a high return on paper. Investors would rather back someone they trust and like, because the capital represents their hard work.
Related questions
- Why do investors say maybe instead of a clear no?A maybe is the easiest answer for a busy investor to give.
- How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
- What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
Questions about this video
What do investors want most in the people they back?
According to Richard C. Wilson, they want a class act who is respectful, kind, polite and professional. They also look for passion, trust and a person who is pleasant to be around.
Do investors choose people based on promised returns?
Richard says they would rather work with someone they trust and like than someone promising a high return. He notes that a promised return is just a number on paper.
Should you act like someone you are not to win investors?
No. Richard says not to be disingenuous. He suggests studying these traits and improving how you communicate.
Put this into practice with the dilution calculator. See all investor psychology and trust resources.
