10 Characteristics Of Great Investors

Matt Blumberg, founder and CEO of our portfolio company Return Path likes to write "counter posts" when he reads something interesting on this blog. Yesterday, after reading the 10 Characteristics of Great Companies, he decided to post the 10 Characteristics of Great Investors.

Most entrepreneurs will enjoy the list that includes some zingers like this one:

Great investors don't publicly take credit for the success of their investments, even if they were major drivers of that success

Go read the entire list. It's a good one.

#VC & Technology

Comments (Archived):

  1. mattb2518

    I had a good comment on this – which is very true – that my post was only from the perspective of a CEO. I should have titled it “10 Characteristics of Great Board Members.” Great investors have lots of different characteristics around sourcing deals, doing deals, managing LPs and raising money, and driving returns for the fund by carefully managing the portfolio, exits, follow-on deals, etc.

    1. fredwilson

      titles of posts are keyi was going to call my other post this morning “RSS Aint Dead” but I’mmuch happier with “RSS is Alive and Well”

  2. Dave Pinsen

    What’s a chiche? Something tells me the Urban Dictionary definition is the denotation being used in Matt’s post.

    1. fredwilson

      i think it must be a typo but it is weird that it is in both uses

    2. Dave Pinsen

      Whoops — I meant to say that I assumed that the Urban Dictionary definition was not the denotation being used in Matt’s post.

  3. reece

    So, in light of ‘great investors,’ here’s a situation that I am currently facing: a potential (angel) investor – a family friend of one of our team members – is introducing us to a few more investors in a meeting soon, and he has asked for a brokerage fee in the event of a sale/exit for our company in the future. Without clouding your assessment with more details, what’s your experience and opinion on this?

    1. fredwilson

      it’s one thing to ask for a fee now for making introsquite another on a transaction in the future that he may have nothing to do withthe answer to the latter is NFWthe best answer to the former (that helps with the latter) is to givehim a fee now for the intros he made in the form of warrants that willbe valuable in the even there is an attractive exita typical fee would be in the 3% range so if he raises $250k for you,then a fee of around $7500 is appropriate and you can give himwarrants for a percentage of the company equal to what a $7500investment would buy right nowhope that helps

      1. reece

        Thanks Fred. Very helpful. He was suggesting .5% of the later deal, though it was unclear exactly what that was a percentage of when he raised the question.Additionally, would a term like this be a red flag to you as a VC in a later round?

      2. Dave Pinsen

        Ah, that’s helpful for me too, thanks. I had a gut feeling that ~3% would be a reasonable fee for a successful introduction to investors, and this confirms it.

      3. ajpape

        Helpful practical insight Fred.A world I’m new to but good to learn some of the standard solutions to recurring situations.

      4. Dave Pinsen

        Fred,If I may ask a follow-up question here I would be grateful. A client of mine is planning to negotiate a finder’s fee with me to introduce him to a joint venture partner, which would be a small regional bank (he runs an alternative finance company for small businesses). If I introduce him directly to such a bank, this would be pretty straight forward, and I’d ask for something along the lines of the 3% finder’s fee you mention above.It happens though that I’ve made a few contacts with investment bankers in the regional bank space. If I introduce my client to one of these investment bankers, and the investment banker successfully presents the JV proposal to one of his bank clients, what sort of finder’s fee do you think would be appropriate for me in that case?Thanks a lot for taking the time to read this.

        1. fredwilson

          well ideally your investment banker friends would cut you in on their feebut if not, then something like 10% of their fee

          1. Dave Pinsen

            Thanks a lot, Fred, I really appreciate it. That was actually what my client had proposed. Interesting how our intuitions were right in the ballpark here.