As an early-stage investor, the first thing I look for is evidence of customer traction. There's a belief that angels invest in ideas but that's unusual outside of the founder's network. Instead, we usually look for businesses that have products that are already generating initial revenue, or at least have trials and pilots with potential customers. Our ability to talk to those customers and ascertain their needs, their test results, their view of the competition, and their purchasing plans takes the investment process from believing entirely in a founder's pitch to reviewing third party validation. The biggest red flag is a lack of honesty or candor by the founder. If there are exaggerations, half-truths, or excessive spinning of answers so that we cannot trust the founder's answers to our questions, we walk away. Our diligence process is pretty limited and we depend on honest information from the team. If they lose credibility, there's nothing to do but pass. DC Palter Executive Committee, TCA Venture Group (https://tcaventuregroup.com/) Author, Pitching Angels (https://pitchingangels.com)
Here's Pablo's thoughts: === I look for founders who ground every decision in long-term vision, even when it means sacrificing short-term advantage. A red flag is a lack of curiosity—as the foundation of building a startup lies in asking great questions and learning rapidly. -Pablo Casilimas, OneSixOne Ventures === Let me know if you want any follow-ups. Best, David
**Ryan Majewski, General Manager at CWF Restoration** After building CWF Restoration's operations across Texas and managing MLM Properties for over a decade, the ONE thing I always look for is **crisis leadership under pressure**. I need founders who can make sound decisions when everything's falling apart--because that's when businesses either break through or break down. The biggest red flag that makes me walk away is **founders who blame external factors for failures**. When someone tells me their business struggled because of "bad employees" or "difficult customers" without owning their role, I'm out. At CWF, we get calls at 2 AM from panicked homeowners with flooded basements--if you can't handle stress and take accountability, you'll crumble when it matters most. My Marine Corps infantry background taught me that leadership shows up in chaos, not comfort. When we expanded CWF's Dallas operations, we faced equipment failures during our busiest season. Instead of panic, we immediately deployed backup resources and personally handled emergency calls. That's the difference between founders who survive tough times and those who make excuses.
After 40 years running my own law firm and CPA practice, plus 20 years as a Registered Investment Advisor, the ONE thing I always look for is **financial transparency combined with realistic profit projections**. I need founders who can show me exactly where every dollar goes and demonstrate they understand their true cost structure, not just hopeful revenue numbers. The biggest red flag that makes me walk away immediately is **founders who can't explain their business model in simple terms**. At Arthur Anderson, I saw countless businesses fail because owners got lost in complexity instead of focusing on clear value creation. If you can't explain how you make money to a 12-year-old, you don't actually understand your business. Through Visionary Wealth Creation, I've coached dozens of small business owners, and the successful ones always have one thing in common: they know their numbers cold and can pivot quickly when reality doesn't match projections. The failures are always the ones who confuse activity with productivity and mistake complexity for sophistication. **David Fritch, Fritch Law Office PC / Visionary Wealth Creation**
Joseph Cavaleri, Broker/CEO of Direct Express Realty After 23 years building vertically integrated real estate businesses, the ONE thing I always look for is **genuine market pain experience**. I need founders who've personally felt the problem they're solving, not just identified it through research. At Direct Express, I built our one-stop-shop model because I lived the frustration of clients juggling five different vendors for property transactions. When a founder tells me about sleepless nights dealing with their own problem before building a solution, that's when I pay attention. My biggest red flag is **founders who pivot their pitch based on who's in the room**. I've seen entrepreneurs completely change their target market between our first and second meeting. Through managing 500+ professional connections across real estate, construction, and lending, I've learned that successful founders stay obsessively focused on one specific problem. The businesses that survive long-term solve problems their founders actually understand from personal experience. During my mortgage officer days, the most successful clients were those who'd previously been burned by bad lenders--they knew exactly what good service looked like.
Christy Robinson, Comfort Temp After 17+ years managing multi-million-dollar projects and building teams, the ONE thing I always look for is **operational resilience under pressure**. I need founders who can maintain quality while scaling rapidly during crisis moments. At Comfort Temp, our 24/7 emergency service taught me that businesses succeed when founders can deliver consistently during their worst days. When Florida heat waves hit and we're fielding 300+ emergency calls, maintaining our response standards separates us from competitors who crumble. I look for founders who have systems that work when everything goes wrong. My biggest red flag is **founders who can't articulate their unit economics clearly**. Through managing vendor relationships and optimizing cross-functional teams, I've seen too many businesses with beautiful concepts but zero understanding of their actual profit margins per customer. During our expansion across North Central Florida, we had to know exactly how much each service call cost versus revenue generated. Founders who get vague when discussing customer acquisition costs or lifetime value are usually hiding fundamental business model problems that will surface when growth accelerates.
**Brett Sherman, Signature Realty** After helping raise capital for PropTech ventures and working with 13+ years in commercial real estate deals, the ONE thing I always look for is **founders who demonstrate genuine market timing intuition**. I need to see they've spotted a trend before it becomes obvious to everyone else. When our AI tool flagged rising rental rates in Northwest Doral six months before CoStar reported it publicly, that's the kind of predictive insight I want to see founders possess about their own markets. The biggest red flag is **founders who can't explain their competitive moat in simple terms**. I once met a logistics software founder who took 20 minutes to explain what should have been a 30-second pitch. If you can't make your value proposition crystal clear to a 12-year-old, you'll never scale past early adopters. What separates successful founders is their ability to turn insights into immediate action. When I syndicated a mezzanine loan against real estate equity to seed a PropTech startup, the founder had already identified three specific pain points in lease negotiations and built solutions for each. They weren't just solving problems--they were solving problems they could prove existed through data.
I look for founders with a real, purpose driven vision. It's important that they can explain their company's work and why it's relevant. This shows they're resilient and focused on the long term. Passion linked to a larger goal often builds strong teams and lasting businesses. A warning sign is when a founder makes false claims about sustainability without providing proof or being transparent. Honesty is key, especially in industries with impacts beyond just profit.
When considering an investment, one thing I always look for in a founder is authentic passion that ties back to a real problem. In the pet care space, for example, I've seen how founders who genuinely understand the emotional bond between pets and their families build businesses with stronger long-term impact. That passion not only fuels resilience but also translates into services that truly add value for customers. A red flag for me is when a founder treats their business as a quick-profit opportunity without empathy for the end-user. In industries like pet care, where trust and emotional connection are everything, a lack of genuine care is the fastest way to lose both customers and credibility. Skandashree Bali, CEO & Co-Founder, Pawland
When I consider backing a business, I always look for founders that demonstrate resilience both in numbers and mindset. For example, I heard a pitch from a founder that had bootstrapped to £250k in annual revenue in under 18 months with almost no outside capital grit and traction like this captures my attention immediately. A red flag that makes me walk away is when the founder explains, in a very justified way, that the market, competition, or "bad timing" are responsible for their slow growth instead of taking ownership of how they executed. If they are off the hook early on, it is doubtful that they will improve going forward.
I'm not an angel investor, but I've sat on the founder side of the table, and I understand what it takes to get investors engaged. I have found that investors want to see founders show three things, quickly and clearly: 1. Passion is different than chasing dollars, you live it and breathe it. 2. Proof is you've done this and built traction and you're showing results. 3. Plan is you know where the capital is going and how it will create growth. The biggest red flag I've seen is when a founder can't respond to hard questions, questions about scalability or risk. It starts with the numbers. Numbers are more than just details, they are the language of trust. When you're not able to speak this language, you lose the attention of the investor. Founders who have succeeded receive support because they can bring the fire of belief and the discipline of preparation. If you can't stand in front of the investor and make them feel both, then you're not ready to ask for their money.
Hi, I'm reaching out on behalf of James Potter, Founder of Rephonic, he also does angel investing in early stage tech companies. The ONE thing I always look for in founders is diverse backgrounds combined with clear vision for improving monthly recurring revenue. I want to see founders who've worked in different industries or roles before starting their company, because that breadth gives them unique problem solving perspectives. More importantly, I need them to articulate specific strategies for increasing MRR beyond just acquiring more customers. Founders who understand unit economics, retention mechanics, and expansion revenue opportunities demonstrate the depth needed for sustainable growth. My biggest red flag is high churn rates in SaaS businesses without clear explanations. When I see monthly churn above 8% and founders deflect questions about retention, that tells me they're focused on acquisition instead of value delivery. I walked away from one promising fintech startup because their churn was 15% monthly and they kept talking about growth hacking instead of addressing why customers kept leaving. High churn usually signals deeper product market fit issues that founders don't want to acknowledge. Available for follow up if needed. Best regards, James Potter, Founder, Rephonic https://rephonic.com https://www.linkedin.com/in/jamesbpotter/ press@rephonic.com
When considering an investment, one of the most important things I look for in a founder is clarity of vision paired with adaptability. A founder who not only knows exactly where the business is headed but can also pivot intelligently when market realities shift shows the balance of conviction and flexibility needed to scale sustainably. On the other hand, a red flag that immediately makes me walk away is when a founder downplays risks or paints an overly perfect picture. If challenges aren't acknowledged upfront, it signals a lack of transparency and resilience—two qualities that are non-negotiable for long-term success. Name: Arvind Rongala Company: Edstellar
One quality that always stands out in a founder is clarity of vision paired with adaptability. The ability to articulate not just what the business does, but why it matters and how it can evolve with changing market dynamics, is what inspires long-term confidence. A red flag, on the other hand, is when a founder is overly optimistic without being grounded in data or execution plans—passion without pragmatism usually signals trouble ahead. Name: Anupa Rongala Company: Invensis Technologies
When considering a potential investment, the one quality that always stands out in a founder is clarity of vision combined with adaptability. A founder who can clearly articulate where the business is heading, yet remains flexible enough to adjust based on market realities, gives confidence that the venture can grow sustainably. On the other hand, a major red flag is when a business relies heavily on buzzwords or inflated projections without a solid execution plan. Overpromising without tangible proof of traction or scalability usually signals that the fundamentals aren't strong enough to support long-term success. Name: Arvind Rongala Company: Invensis Learning
**Ben Read, Co-founder and CEO of Mercha.com.au** After raising capital through both VCs and equity crowdfunding for our B2B e-commerce platform, the ONE thing I always look for is **execution consistency on small promises**. During our early customer calls, I learned that businesses fail when founders can't deliver basic commitments like "I'll call you back tomorrow" or "Your order ships Friday." We had a Melbourne construction company head of marketing tear us apart because we didn't call her when promised and failed to communicate order delays. That feedback was worth its weight in gold - she taught us that investors and customers judge you identically on follow-through. Now she's still our customer two years later. My biggest red flag is **founders who blame external factors for internal failures**. When we copied a feature from a US competitor without understanding our Australian market, it flopped completely. The founders who get funding own their mistakes and extract actionable lessons. Those who point fingers at "market conditions" or "timing" never make it past our second conversation. Through building Mercha from bootstrap to 130% year-over-year growth, I've seen that sustainable businesses are built by founders who master the mundane basics before chasing the exciting innovations.
Hi, When I look at founders, the one thing that makes me lean in is their understanding of distribution before product. Too many entrepreneurs obsess over building a shiny product, but the hard truth is that even the best idea will flop without a clear plan to acquire customers. At Get Me Links, I've seen this play out directly: we took a brand-new site in the health niche and turned it into a traffic and revenue machine through targeted link building. Within a year, they were ranking for thousands of keywords and generating consistent revenue, not because the product changed, but because their visibility exploded. That's the kind of execution and foresight I want in a founder. The biggest red flag for me is when a founder confuses ambition with arrogance. If they can't clearly show how they'll get their product in front of buyers or worse, dismiss marketing and SEO as "secondary" I walk away. It tells me they're not grounded in reality. Great founders don't just dream big, they obsess over the unsexy part: making sure people actually find and buy what they're selling.
I personally have been angel investing since 2005 and the one thing that I would always look in a founder is adopting the capability of pivoting without forgetting its fundamental mission. Most entrepreneurs marry their business model and are unwilling to change when the markets shift. I have witnessed great ideas being failed, as founders were not flexible in changing their strategy when clients insisted on something other than that. The largest red flag, which sends me away on the spot? In case founders are unable to make sense of their business model through a simple definition. When you require 20 slides and complicated jargon to explain me how you make money, then there is an issue. I had once sat with a tech founder explaining to me their revolutionary platform and never mentioned how it is supposed to be paid. That meeting ended quickly. This was because my experience in real estate financing has trained me to the fact that successful businesses are great at solving real problems facing real people. The principles would be unaltered, whether I am window dressing an organisation in hard money loan or assessing a startup. Explicit value proposition, revenues is recognizable and founders who have the perception of their market both inside and out. It is theory all the way around. Jimmy Fuentes is the Consultant at California Hard Money Lender and Licensed Broker at Monterey mortgage.
Founder & Community Manager at PRpackage.com - PR Package Gifting Platform
Answered 6 months ago
Victor Hsi, Digital Asset M&A at BMRY.com One thing I look for: I invest via my BMRY model - it stands for Buy, Monetize, Reach, Yield. I look for scalable, low-touch businesses that can grow without constant input. When I invested in PRpackage.com, it already ranked top 3 for "PR package" and had 50k+ email subs across PRpackages.io & UGCcreator.com. Even if someone clones the idea, they can't copy the domain name (best in category), deliverability, or the guaranteed ad views from a loyal newsletter base. One red flag: If the business only runs with the founder's face or low lifetime value, which requires a constant churn to earn revenue - I'll give it a pass.
**Mike Wislinsky, Founder and President of Denver Floor Coatings** After 20+ years at 3M leading 100+ person teams and building three successful businesses since 2004, the ONE thing I always look for is **operational discipline with financial transparency**. I need founders who can show me exact profit margins, track daily cash flow, and have documented processes for their core operations--not just big vision PowerPoints. My biggest red flag is **founders who can't explain their unit economics in under 60 seconds**. At Denver Floor Coatings, I can tell you our average garage job costs $2,847, takes 6.2 hours of labor, and delivers 47% gross margin. When I co-founded my previous business in 2004, we maintained 98-100% customer satisfaction ratings because we tracked everything obsessively. The difference between profitable businesses and failing ones isn't the idea--it's execution precision. During my 3M years, I saw countless "revolutionary" products fail because leadership couldn't manage the basics of inventory, quality control, and cost management. Show me your numbers first, then tell me about changing the world.