The Hardest Prediction in Venture Capital: People

As a VC, the biggest bet you make is often on the founder.

Sometimes, a founder’s energy, enthusiasm, and confidence can be contagious. You leave a meeting thinking: This is someone I want to back. And especially at the pre-seed stage, when there may be very little evidence of the founder’s ability to execute, it can be tempting to make an investment decision based on that initial impression.

They understand the market. They know what they are doing. They are willing to do whatever it takes to make the company work. They are a hustler.

But these qualities, on their own, do not necessarily make someone a backable founder.

Many of these traits are genuinely present in strong founders. The problem is that when they exist without other strategic qualities, they can create the impression of competence without necessarily demonstrating it.

So, what else should we look for?

1. Focus.

One of the clearest things that can emerge through repeated conversations with a founder is how focused they are.

At the early stages, founders will naturally be exploring. But there is a difference between exploring intelligently and constantly changing direction.

For example, if every time you speak with a founder they are exploring something new, a different partnership, a new customer segment, another product feature, or an additional service that is not closely connected to where the product is today, it may be a sign of distraction rather than ambition.

At pre-seed, the founder's attention should largely be directed toward one thing: the customer and the problem they are trying to solve.

2. How deeply do they believe in the problem?

Building a startup is difficult. It requires patience, resilience, and a long-term commitment to solving something that will inevitably get harder before it gets easier.

As an investor, you do not want to back a founder who loses conviction at the first major obstacle.

One way to assess a founder's ability to stay the course is to understand how deeply they believe in the problem they are solving.

Did they experience the problem themselves?

Did they see someone close to them struggle with it?

Did they spend years working in the industry and repeatedly encounter the same pain point?

Or did they simply identify an interesting market opportunity?

There is an important difference.

When founders have a deeply rooted belief that a problem exists and deserves to be solved, that conviction can become an important source of resilience. When things go wrong (and they will) the belief in the problem can keep them going even when the original solution, product, or business model needs to change.

3. The right kind of stubbornness

There are two types of stubbornness.

The first is the dangerous kind: being so attached to your own idea that you continue pushing it even when the evidence clearly tells you that you are heading into a wall.

That kind of founder can be extremely difficult to work with.

But there is another kind of stubbornness that I would argue is essential.

You do not want to back a founder who changes their mind every time someone disagrees with them. You do not want someone who is simply moved by whoever spoke to them most recently.

After all, when you invest in a founder, you are investing in their vision and their ability to develop that vision, not in the collective opinions of everyone sitting around their cap table.

To be completely honest, it is not always easy to distinguish the two types of stubbornness early on. Sometimes you can sense it in the first few conversations. But often, it becomes much clearer over a longer relationship with the founder.

The hardest prediction in venture capital

Venture capital requires making a lot of predictions.

You predict the size of the market. You predict customer behaviour. You predict how the company will grow. You predict what the business could become years from now.

But perhaps the hardest prediction is the person.