What an investor really looks for in an early-stage startup
Founders often think investors make decisions by looking at spreadsheets. After years of analyzing early-stage startups, I can confidently say: at the beginning, the spreadsheet comes last. Something else carries the weight, and almost nobody prepares founders for it. I will be direct about what really matters.
What does an investor look at first in an early-stage startup?
The founder. Before the product, before the market, before the metrics. In an early-stage startup, almost everything will still change: the product will pivot, the market will turn out to be different and today's numbers will mean almost nothing tomorrow. The only constant throughout that journey is the person leading it. That is why my first question is not 'how much revenue do you make' but 'who are you and why you'.
This scares founders who have prepared a deck full of charts. But it is liberating once you understand: at an early stage, you are not selling a finished company. You are selling your ability to discover the right company along the way.
What makes an investor believe in the founder?
A few things I look for, in no strict order:
- Obsession with the problem. A founder who knows the customer's pain better than anyone conveys a confidence no financial projection can replace.
- Clarity of thought. It is not about knowing every answer; it is about thinking clearly about what you do not know. A founder with confused thinking builds a confused company.
- Speed of learning. What the startup is today matters less than how quickly the founder learns and corrects course. I back people who improve fast.
- Honesty about what is not working. A founder who hides problems in the pitch worries me more than the problems themselves.
What about metrics? Do they count for nothing?
They count, but their weight depends on the stage. In a later round, numbers are king. At an early stage, metrics serve less to prove that the company has already succeeded and more to show that the founder knows how to measure the right thing. A founder who tracks the indicators that really matter to their business, even if they are still small, tells me more than a growth chart without context.
A common mistake is inflating the deck with vanity metrics: big numbers that mean nothing. Experienced investors see through that immediately, and it undermines trust, precisely the most valuable asset at this stage.
How should a founder prepare to speak with investors?
By spending less time rehearsing the perfect pitch and more time gaining real clarity about their own business. The best investment conversations I have had were not flawless presentations; they were honest dialogues with founders who understood the problem deeply, knew where they were struggling and had a convincing vision of where they were going.
At an early stage, you do not raise money for the company you have. You raise it for the company the investor believes you are capable of building.
That assessment of the founder guides Entrypoint, NewHack's investment arm. We get involved early, when it is still more about the person than the spreadsheet, and stay close, because at an early stage capital without proximity delivers little. If you are building something and want an honest conversation about it, founders like you are the reason we exist.