During Inman Connect New York, a group of venture capitalists emphasized the importance of having a leader who is willing to go above and beyond for their company in order to secure funding.
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To attract investors, a startup needs a groundbreaking idea, some revenue, and most importantly, determination.
This sentiment was echoed by a panel of venture capitalists discussing how emerging real estate software companies can secure the necessary funding to grow.
While the specific product type or category was not discussed (CRM, transaction, AI lead generation), they all agreed that every new company seeking capital requires a fearless leader who is willing to make sacrifices for the success of the company.
Dave Eisenberg, founding partner of Zigg Capital, mentioned that his company typically rejects many proposals before finding the right fit.
“You’re looking for expertise in the industry, founders who are uniquely suited for the business, and a strong sense of determination,” Eisenberg explained. “The failure rate for proptech startups is not zero. You need individuals who can persevere through challenges like a global pandemic or volatile market conditions.”
Louise Dickins, Founder of LMRE, shared a similar perspective.
“We work closely with CEOs, COOs, and founders who demonstrate resilience and leadership during tough times, such as the past year, which was particularly challenging. We seek individuals with gravitas,” she stated.
L.D. Salmanson, CEO of Cherre who likes to go by the title of “Maverick Herder,” emphasized the need for audacious vision.
“Most VCs, whether openly stated or not, evaluate startups based on one core question: ‘Will this change the world?’ because it signifies the potential for significant returns,” he elaborated. “They look for founders who can defy the odds and bring their vision to life. Giving up is not an option.”
Traction is also crucial according to Salmanson. Whether it’s a sense of excitement surrounding the idea, a growing fan base, or a compelling story, without any of these elements, he is not inclined to invest.
Gedion Haddis from Camber Creek, a backer of Ryan Serhant’s new tech venture, highlighted the importance of having a forward-thinking vision and the ability to define a new category.
“We focus on unique differentiation, scalability, and strong leadership. With Ryan Serhant, we saw his extensive real estate expertise, a distinctive platform, and innovative technology that addressed pressing industry challenges,” Haddis shared. “This combination effectively alleviated pain points in an ever-evolving environment.”
The viewpoints of the panelists regarding leadership and concept validation align with the findings from The Center for Real Estate Technology and Innovation (CRETI).
“Investors now prefer companies with solid financials and a clear return on investment narrative,” the Center stated in its 2024 year-end report. “The era of growth at any cost is over. The focus has shifted towards sustainable, scalable solutions that offer a tangible ROI. This evolution signifies the industry’s growing sophistication over the past decade.”
In conclusion, having a brilliant idea is not enough moving forward, especially without revenue to support it.
Email Craig Rowe
