“I PRE­FER IN­VEST­ING IN MIS­SION­AR­IES”

Bong Koh worked for a tra­di­tional ven­ture cap­i­tal firm based in the Bay Area and co­founded three start- ups be­fore launch­ing Ko­hFounders, a Chicago- and Los An­ge­les- based early- stage in­vest­ment fund. He spoke with HBR about how he sizes up founders. Edi

Business Today - - THE HUB -

Q: Do en­trepreneurs over­es­ti­mate the im­por­tance of the busi­ness idea they’re pitch­ing rel­a­tive to the way they present them­selves?

A: I 100 per cent be­lieve that they do. Al­though the busi­ness idea is ob­vi­ously very im­por­tant, I tend to fil­ter out ideas and mar­kets I’m not in­ter­ested in be­fore de­cid­ing whether to even take a pitch meet­ing. In the ear­li­est stages, when you’re an an­gel or a pre-seed in­vestor, there isn’t a lot of in­for­ma­tion about whether the busi­ness will gain trac­tion. You have to take an ed­u­cated guess about whether there’s a mar­ket, and you have to eval­u­ate the other as­pects of the pitch. A lot of it comes down to ‘Do you be­lieve in this team?’ That’s first and fore­most for me once I’ve de­cided some­thing is a mar­ket op­por­tu­nity I want to ex­plore. I want to know if the en­trepreneurs are will­ing to grind it out.

Q: This re­search sug­gests that a calm de­meanour is more at­trac­tive to in­vestors than pas­sion or en­ergy. Do you agree?

A: I ac­tu­ally pre­fer high-pas­sion, high-en­ergy en­trepreneurs. Peo­ple who start busi­nesses are ei­ther mer­ce­nar­ies or mis­sion­ar­ies, and I pre­fer in­vest­ing in mis­sion­ar­ies – peo­ple who re­ally be­lieve in the pain point they’re solv­ing.

Q: How im­por­tant is an en­tre­pre­neur’s will­ing­ness to be men­tored?

A: I can’t make a com­pany suc­ceed. Any in­vestors who say they can are ar­ro­gant.That said, I do look for peo­ple who will be good part­ners, who are open to feed­back. If peo­ple get too de­fen­sive when re­ceiv­ing feed­back, it can be chal­leng­ing to work with them.

Q: How hard is it to as­sess th­ese traits in a sin­gle pitch?

A: I try not to fo­cus too much on how the en­tre­pre­neur pitches. Just as there are peo­ple who ex­cel in job in­ter­views but make hor­ri­ble em­ploy­ees, there are peo­ple who are re­ally good at pitch­ing but are not nec­es­sar­ily good as op­er­a­tors. I try to spend a lot of time with an en­tre­pre­neur out­side the pitch set­ting be­fore I in­vest. That’s one of the rea­sons I do not in­vest a lot in the Bay Area – deals can move very quickly there, so it can be hard to spend a lot of time with a start-up be­fore reach­ing a de­ci­sion.

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