Stop Calling Them “Soft” Skills

Earlier this year, I participated in a reverse pitch with a bunch of other venture capitalists. In case you’re not familiar, traditional pitch events look like startups pitching to an audience of investors, but reverse pitches mean that venture capitalists actually pitch our funds to startups.

I love reverse pitch events because they help startups get a quick sense of who will likely be interested in what they’re up to and, therefore, which relationships they should try to build. Plus, it flips power dynamics. Instead of a room full of investors silently sitting back and judging their ideas, startups are empowered to make a choice about who they want to approach.

At this event, I was one of the first VCs to speak. So, I shared what we’re about:
GAN Ventures is a $6M fund that invests $100K in all types of pre-seed and seed-stage companies as long as the founders have four specific traits:

  1. They’re self-aware. The founders have a good grasp of their own strengths and weaknesses and aren’t afraid to ask for help when needed.

I love our answer.

After all of the other VCs finished pitching, three founders approached me separately and said nearly the exact same thing — something I hadn’t heard before:

“You were the only VC on stage that mentioned what softer skills you were looking for.”

When I thought about it, they were right. Every other pitch from my fellow VCs only went over some version of the following:

  1. The size of the checks they’re writing to startups.

They mentioned nothing about the hearts and minds of the people actually running the companies they’re investing in.

I’m truly not trying to bash other investors; I know we all do it.

But I left the event feeling discouraged. Over the past few months, I’ve been thinking a lot about how the words I use and thoughts that come into my mind have an almost direct impact on the actions I take.

And people pick up on this. They pay attention to the words we use because those words give real insight into what we care about.

So, as I reflected on the event and put myself in the shoes of all the founders sitting in the room, I was positive that they likely all believe that investors only care about what founders do, and not who they are.

To me, this is a missed opportunity. When we don’t share what we’re looking for in the actual people behind the companies we’re investing in, it’s a disservice to everyone — startups and investors included. Here’s what I mean.

I Know Investors Care

In private conversations with my fellow investors, our discussions often include the types of founders we’re looking for. So I know that my investor friends not only care about who founders are but often believe that it’s the most critical element to consider when investing. But publicly, most investors don’t feel comfortable bringing it up.

Why? “Soft” skills have a stigma. They’re harder to measure, they’re often gendered (and therefore devalued or outright discouraged), and they’re really difficult to judge with any sort of objectivity.

But I think that startups want to know what matters to us. They want to know that we care about them beyond what they simply produce — that we also care about how they run their companies and the work they’re doing to become better humans.

Bringing up what we’re looking for in the hearts and minds of founders shows this level of care. It’s a signal to startups that we’re thinking, yes, of the return they might bring us. But so much more, too.

For instance, one of my favorite VC funds is Blue Note Ventures. Their Managing Partner, Chris Marks, is so clear about what he’s looking for and you can find it here. He’s showing that he cares by the words he uses. And the theory goes that, in hearing these things, more startups will begin to exhibit these traits and then, of course, more of them will get investment. Because he’s actually bringing it up. And bringing it up matters. Because representation matters.

More Than “Nice” To Have

This all might sound “nice” and very “social impact”-oriented to you, but we have to stop thinking about them that way. There is so much evidence behind how essential the emotional health of individuals and teams are to the success of a company that it feels silly to even have to defend. We’ve all read how often startups fail because of the relationship between cofounders doesn’t work out, or because a founder isn’t getting critical mental health support, or because they don’t know how to communicate well — even if their product is great. So, a founder’s mentality and ability to work well with others is absolutely foundational. But here are some stats from Crunchbase, just in case you need more proof:

Startups most often go out of business because:

23%: they don’t have the right team

13%: they lose focus

13%: there’s disharmony on their team

9%: they lose their passion

8%: they experience burnout

If you do the math, that’s a full 66% of startup failure due to “soft” issues.

So, clearly, it’s something we should be prioritizing if we’re going to have long-term, successful startups.

Yet, so few of us get up and declare that we’re looking for these traits and we fail to help founders avoid them as pitfalls.

Which is why GAN Ventures is committed to bringing it up all the time. In fact, we make it our main focus.

Not to be better or different than other investors.

But because we believe that bringing it up a bunch will hopefully help founders realize that it’s actually something that we — and so many other — investors care about. And that we care about it because we truly want startups to be successful.

Specifically, here are some ways we intentionally make mention of this focus:

  1. On our website.

And I really encourage others to start asking how they might implement this kind of behavior, too. If you already are, would you share with me how you’re doing it? How are you helping founders know that they’re cared for and that, as investors, we are supporting them in more ways than simply financially?

Originally published at on October 29, 2018.

Helping to give startups the power to create and grow their business wherever they are as CEO of GAN: @GANconnect