The one thing that most startups forget that would help them find funding
Dave MClure, Founder of 500 Startups, said that “a ‘startup” is a company that is confused about – 1. What its product is, 2. Who its customers are, and 3. How to make Money” . Because of this, founders of startups need to be able to change their business almost as soon as they fill out the paperwork. Many angels are experienced entrepreneurs themselves that invest because they believe in the startup, and they feel they can help contribute to that startup’s success. However, for an Angel investor to be able help a startup, the founders of that startup need to be willing to listen to the investor. That’s why coachability is one of the most sought after and often forgotten traits of startup founders.
A coachable entrepreneur is someone who is prepared and willing to be wrong. That person is someone who is open to being corrected, can withstand bluntness, and handle constructive criticism from their employees, investors, and customers.
Why does coachability matter?
Besides the fact being coachable not only allows you to find more angel investors and have better relationships with your investors, being coachable will usually lead to a better return. A recent study from Willamette University called “Returns to Angel Investors,” found that on average, investments in startups with a low level of participation, meaning one to two times per year between investors and startups, yields a 1.3x return on investment over 3.6 years. In contrast startups that received a high level of involvement from their investors, meaning one or two times per month, yields an average 3.7x return on their investment in 4 years. Being coachable can be a very effective way to increase your startup’s success.
How to improve your coachability?
Coachability is all about the actions of the entrepreneur. Dr. Bob Acton a leadership coach with Obair Leadership, measures coaching in three distinct ways. You too can improve your coachability by focusing on these three areas.
The first way to measure if you are coachable, is to judge your level of willingness to learn. Dr. Acton states that you can observe this willingness by looking for patterns on how you improve yourself. A coachable leader will invite feedback. This leader will also seek to read and take courses to improve themselves in the areas that interest them. You can improve your own willingness to learn by recognizing that you don’t know all the answers and that you need to make time to continually try to fill in the gaps.
The second way to measure your level of coachability is to honestly judge your ability to seek out and accept feedback. To do this you want to try to not be defensive about the feedback you receive. This sometimes is easier said than done and although there are many websites on the internet to help with defensiveness, what usually works best for me is to extend a bit of trust. Once you do that, it’s usually easier to rationalize internally with yourself. Any criticism you receive is usually done to further clarify what’s trying to be conveyed, or to help uncover problems early on.
The final way to measure to level of coachability is by the steps and actions you have taken, in reaction to the feedback you have received. Taking notes is a great first step in this process. Not only does it show respect to the people giving the feedback, but it allows you to accurately improve your processes based off that feedback.
It might sound like being more coachable means giving up, or compromising on your ideals or vision as a founder. However this isn’t the case. Being coachable means being willing to listen and change facets of your startup. Sometimes, once you have explained your point to an investor, the best you can hope for is to agree to disagree on an issue. It is however, better to find out you disagree sooner rather than possibly giving you trouble later.
About the Author
Jeremiah Tremble is an associate of the Rebel Venture Fund and is currently an MBA student at UNLV. Ever since Jeremiah was a kid, he has been passionate about business. His early experiences in business really taught him a lot, and has since focused his interests on technology and entrepreneurship.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of RVF or UNLV. In addition, thoughts and opinions are subject to change and this article is intended to provide an opinion of the author at the time of writing this article. All data and information is for informational purposes only.