This three-part series will focus on lessons I have learned along the way of my entrepreneurial journey.
For more than 30 years, I have had the opportunity to be an entrepreneur, investor and educator. As an investor, I have screened over 1,000 entrepreneur pitches and one of the main qualities I look for in an entrepreneur is passion.
An entrepreneur’s passion is contagious. It helps propel people through challenges, inspires others and can make the difference between success and failure for many entrepreneurs and startup companies.
In 2010, I helped create a research study team where we looked at the importance of passion in the investing process. In the first phase of the study, we asked 150 angel investors nationwide for their definitions and perceptions of passion. We also asked if an entrepreneur’s passion is important in their investment decision.
The results were a resounding “yes, it is important” and their definitions of entrepreneurial passion could be categorized into three main classifications.
The first definition we categorized was “displayed affective passion,” which includes the outward enthusiasm and excitement the entrepreneur displays when pitching to investors. The second category was “displayed cognitive passion,” which is the preparedness the entrepreneur shows and their knowledge on their particular industry. Have they put in the time and research to learn everything they can about their competitors and customers?
We call the third category “commitment passion,” which is the amount of time and money the entrepreneur has invested in their passion. For this category, the entrepreneur is doing everything they can to win, such as displaying persistence and taking risks. Are they all in? Did they quit their job, mortgaged their home to start the company?
Is this all that matters? No, angel investors made it clear that the entrepreneur has to have a unique business idea. The surveyed investors made comments like: “No amount of passion can make a pig fly,” or “Passion is just one part of the equation: skill, knowledge and intelligence…also matter.”
Deep rooted passion is intrinsic and pervasive at an emotional, behavioral and cognitive level. If you don’t feel this level of passion for your venture, you should keep looking for the opportunity that you feel deep in your gut. You will need this passion to push you through the tough times of your startup. This level of passion will exude from within, help keep you committed and prepared, and also inspire.
Passion matters to investors!