What do you see the most when you invest, Alireza?
When you consider seeking out Venture Capitalist (VC) investment, what is the first thing you think of?
For some, it’s having the next great concept or product that will change the market forever. For others, it’s the ability to pitch the greatest idea to high-level investors and hoping to land a lucrative investment deal.
For Alireza Masrour, success in the VC realm begins and ends with people.
Alireza has years of experience in the VC investment industry as a General Partner at Plug & Play Investment Arm. As part of Plug and Play, Masrour has helped fund and guide over 100 investments for over a decade.
Before coming to the team at Plug and Play, Alireza founded NekaTel, one of the largest Internet Airtime Distribution Networks, growing the company’s revenue from $0 to over $45M in less than two years.
In a conversation with Potlatch founders and startup entrepreneurs, Alireza helped potential founders discover some key insights into how to gain the interest of lucrative VCs and help bring their businesses and ideas to life.
What Doesn’t Work
One question that many early founders have for Alireza is “What doesn’t work?” As an investment leader, Alireza reviews about 20–30 companies, with Plug and Play only investing in about one company per week. So what makes so many miss the mark?
“To be honest, there isn’t a list of ‘what not to do.’ If you wanted to know, you would have to come to my office and look at each and every unique business who wants to be invested in. Each that we pass on has a reason as unique as the company.”
The key, says Alireza, is to learn from why you don’t get chosen for investment. Inside rejection is the most valuable feedback for your future.
“You are going to learn the most when you don’t receive money. Remember, you can’t lean on the consumer or the customer to provide you with the direction to build your business. You can’t trust them, because they don’t know what they need! You need to trust your experience, your intuition, and the feedback you get for why you aren’t picked.”
Alireza encourages founders to keep pushing forward despite obstacles, learning from their own experiences as they go. However, in Alireza and Plug and Play’s experience, there is one major reason that businesses are not picked for investment — the lack of a true team.
Are Investments About The Idea Or The Team?
For Alireza, choosing a startup to invest in and build is more about selecting the right team behind a product rather than the idea itself. If a founder is going to go it alone, they will already face a difficult path forward without a team at their side.
“If you aren’t going to move forward with a cofounder or founding team, you are going to need to build enough traction to let you connect with investors. Without being able to prove that another individual or group is willing to go into business with you, you are already going to face difficult obstacles.”
For Alireza, finding unicorns starts with finding the right members on a team. If a team has the right people on the founding team, you will feel more confident and comfortable in investing time, money, and resources into the potential idea.
“This is a very emotional business. The moment that I know that I like you, I will already be moving toward a position to invest. Never regret or lose hope if you have pitched to 200 VCs and haven’t landed funding or partnership. However, pay attention to the feedback you are receiving and work hard to make the necessary changes to succeed.”
Alireza believes that even missing out on a potential partnership or funding doesn’t mean failure. Many times, the ability to make inroads with an investor network is even more valuable than pitching to your favorite VC.
A good team will help you get through all of the challenges that come with startups much quicker and more smoothly than if you were on your own. Because of the high value of a good team, Alireza and his investors immediately pass on those who fail to showcase that they have a strong team with great visions and partnerships.
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