4 Hidden Criteria for Selecting Founders: An Inside View from the Venture Market

Azizbek Kurbonov, city — Tashkent, IT entrepreneur, Instagram

Experience shows that what investors say and what they do in practice do not always align. I often come across articles in the media or private blogs by investors — almost everywhere it’s the same thing. This article will be useful for startups at the ideation and Pre-Seed stages.

I’ll start with a basic point and won’t number it. As the song goes, “this is the bare minimum.” Investors claim that founders’ skills and the market are important. But, in my opinion, they are primarily looking for charisma and energy. Even if you don’t have a product or a strong technology team, but the investor is thrilled by communicating with you, the probability of closing the round is about 80%. If the round is not closed, you will at least get a referral to another investor, enter the pipeline, or find your first client through the investor’s network.

1. Don’t chase hype and heavily promoted technologies

Investors often say: “We don’t invest in hype, we value real substance.”

But in practice, hype influences the capital market more than anyone admits. If a technology is in the spotlight — AI, agents, autonomous systems — investors feel pressure from LPs: “Why aren’t we in this topic?”

The paradox: an investor publicly denies the chase for hype, but the internal processes of the fund still fuel it.

The founder’s key skill is to explain that the product is not just “riding the trend,” but solves a real problem, while visually fitting into the modern technological context. Even if you are not building an AI company, it is important to show how your product works in a world where AI is changing everything.

2. Have a strong technological base, preferably developed in-house

Investors constantly repeat “the technology must be proprietary.”
This sounds correct, but reality is more complex: a huge number of successful products are built on open-source, API, or white-label solutions. 

I won’t provide examples from Central Asia, where large startups use others’ solutions based on revenue sharing. 

So let’s understand what investors really check:

— is the team capable of rapidly developing the technology, not just owning it? If you use someone else’s technology, how quickly can you switch to another provider or change, for example, the CJM?
— does the CTO understand the fundamental levels of the product, or is this actually a junior back-end developer calling themselves a CTO?
— can the team double the development speed in three months if the market changes? How will the technology team handle the task if the startup has to pivot?

In other words, it’s less about “whose technology it is” and more about who is capable of developing it faster than others.

3. Properly register the company, choose the jurisdiction, draft agreements

In almost all articles, this is presented as one of the key factors for attracting investment. But in reality, legal cleanliness is important… only after the investor has already decided to invest.

I personally know a couple of startups from Central Asia: investors advised them to choose Singapore or other jurisdictions. The founder spent money on registration, but in the end, the investor simply declined.

Until that point, the investor is actually looking at something else:

— market size
— superpowers of the team
— growth rate over the last few months and traction
— the founder’s ability to deliver on promises. 

Legal details are a nice-to-have, but not a must-have. Keep in mind that this can become a reason for delaying the deal, which is also unpleasant.

4. Have a clear financial model, forecasts, and development scenarios

Investors ask for the financial model, but not because they believe in your forecasts.
They understand that everything you forecast is almost certainly going to be wrong.

The financial model is needed for something else:

— to see how the founder thinks in numbers. I remember an interview with several investors who asked to show several development scenarios with arguments in Excel during the presentation
— to understand whether he calculates unit economics and how he does it.

Most investors don’t even open Excel. They only look at 3-5 key metrics that show adequate thinking and understanding of the product’s economics.

In practice, it is more important not the model itself, but the founder’s ability to quickly update it after a critical question.

You don’t have to be Mel Gibson from the movie “What Women Want” to understand investors’ thoughts.