Why you? This is one of the most essential questions every investor will ask when you’re pitching your deck. In this article, we’ll help you understand what makes your team stand out and what could increase your chances of fundraising success. Let’s dive in with the insights of Ján Búza, Partner at ZAKA VC, where they evaluate 7K+ start-ups annually.
Classmates, not campuses
Let’s start with the facts and what the numbers and investor best practices actually tell us.
“70% of European unicorns are founded by classmates from the same university. Investors want teams that share some history together,” says Ján Búza, emphasizing that prior collaboration among founders is one of the key factors they consider when evaluating a start-up team for investment.
Many investors still believe that the university founders attended matters a lot, especially if it’s a prestigious one like Cambridge or Harvard. But the data tells a different story. Founders from top-ten universities don’t have any real advantage and perform no better than those from the top-100 list.
On the other hand, what really matters is having a technical co-founder on the team, rather than only business founders. This actually doubles the likelihood of securing follow-on funding.
Ex-MAG 7? That’s impressive, but it’s not a golden ticket
One of the biggest factors that can significantly increase your chances of fundraising is the founders’ previous experience.
- Being a second-time founder - even if your previous start-up didn’t succeed - can positively influence investors’ and VCs’ decision-making.
- You might also assume that being a former employee of the “Magnificent 7” companies (Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Microsoft, and NVIDIA) would give you a golden key. While this may have once been true, current data shows it’s not a strong predictor of start-up success. Large corporations operate very differently from start-ups, and the skills that shine in a big company don’t always translate directly to start-up dynamics.
- International work experience is a big plus.
- Interestingly, years of experience don’t define a founder’s greatness - it’s the quality of experience.
- Investors also look at a founder’s general experience, including their leadership experience and entrepreneurial drive.
- Industry experience relevant to the start-up is a key component of Team-Market Fit that every investor considers.
Solo founder vs. Team
Start-ups often wonder how investors view solo founders versus teams.
Ján Búza explains: “Many VCs do not invest in solo founders. ZAKA VC usually looks for teams.”
Statistics back this up: start-ups with multiple co-founders have higher chances of fundraising after the seed stage. This doesn’t mean “too many” co-founders, 2 to 4 is generally ideal, though the optimal number can depend on the industry.
Looking for unicorn founders
While most start-ups never become unicorns, investors want to see ambition to reach that level. A founder without strong ambition from the start doesn’t align with the investor’s model.
Equally important is a founder’s clearness of thinking: what you are building, why you are building it, and how you plan to get there. Ján shared that founders who lack a clear long-term vision and expect investors to provide all the answers are less attractive for investment. Investors can guide and support, but they are not there to tell you exactly what to do with your start-up.
Resources: research by Ilya Strebulaev and Episode 1 Ventures
