Some years ago Geoff Smart, a PhD psychologist who was then at Claremont Graduate University, conducted a revealing research project. He studied fifty-one venture capitalists, people who make gutsy, high-risk, multimillion-dollar investments in unproven start-up companies. Their work is quite unlike that of money managers, who invest in established companies with track records and public financial statements one can analyze.
Smart specifically studied how such people made their most difficult decision in judging whether to give an entrepreneur money. You would think that this would be whether the entrepreneur’s idea is actually a good one. But finding a good idea is apparently not all that hard. Finding a good entrepreneur who can execute a good idea is a different matter entirely. One needs to find a person who can work long hours, build a team, handle the pressures and setbacks, among technical people and problems alike, and stick with the effort for years on end without getting distracted or going insane.