3 Green Flags and 2 Red Ones I Look for in Founders

I love working with Founders. There is a special kind of compatibility I can achieve with someone who is over-indexed on Innovational and Relational thinking because they balance out my Procedural and Analytical affinity.

However, as I evolve my portfolio of startups I work with, I am becoming more keyed into the type of person I want to work with. Here are my 3 Green Flags and 2 Red Flags that I look out for when chatting with a potential collaborator.

Green Flag #1: They Are Brutally Honest and Open About the Role of Money

A Founder should be clear that their goal for starting a company is to make a TON OF MONEY. They aren't doing it to "change the world" (see the Red Flag section). They are doing it to win at capitalism and get their bag by growing fast and getting sold for 7-9 figures.

I like Founders who can admit this AND be clear on their values and ethical boundaries around this goal. In fact, some of my favorites are those who realize that their ethics may prevent them from attempting the startup route and maintain a lovely lifestyle business instead.

But in general, this self-awareness around money helps me understand how the Founder is going to act when it is time to make decisions that come down to integrity vs. profit and I can adjust my expectations accordingly.

See, I can get on board with a lot of decisions, if someone is consistent with who they say they are. Let's say Person A says that the most important thing to them is to protect their livelihood and Person B says that the most important thing to them is to do the right thing. Now let’s say Person C, who controls A & B's paychecks, has started publicly behaving inappropriately and causing harm.

In this case, I wouldn't expect any action from Person A. They were clear on how they operate and what is important to them. I respect that. However if Person B does not take action to hold Person C accountable, they have revealed themselves to be either a spineless liar who cares more about how they are perceived than living their values or someone with not enough self-awareness to be a leader I can support.

Green Flag #2: They Know Feedback = Love

The best Founders tire me out with how much they are constantly soliciting feedback from everyone they know - and have the wisdom to discern what’s useful and what is not.

Even better, these Founders understand the power of unsolicited, specific, positive feedback to their teams. They realize that this is the best path to building great people to make their vision into a reality.

These are the Founders who also understand that feedback is not only a formal conversation or document that happens at a scheduled time. They are wise enough to understand that feedback is constant and apparent in day-to-day action. It is communicated through pay, through the level of appreciation shown, through how much autonomy is given, through which opportunities are presented and through a million other ways that collaborations happen.

Green Flag #3: They Understand that Priority Means One

Q: What do you call a Founder who focuses on one goal at a time?

A: Successful

Founders have lots of great ideas - that's their job! It is often daunting for them to pick one, understand the next step, and then focus until it is seen through.

But when I find a Founder with that skill, I am their ride or die because I know we are going to build a company that is cohesive, collaborative and going to get us where we need to be - all thanks to our North Star Metric.

I am not going to belabor this point. You either get it or you don’t.

Red Flag #1: They Want to "Change the World"

When a Founder leads with this as their "why", I immediately I question their credibility. Either they are blowing smoke (because they lack Green Flag #1) OR the way they want to change the world is for the worse.

Hot Take: The last effective way to make a positive change in the world is to start a company or non-profit (the second-to-last effective way is doing nothing). To be clear, I'm not saying that companies don't make positive changes, I'm saying that if it is your primary goal, there are a million more ways to be effective than participating in capitalism.

Red Flag #2: They Prioritize Appearances over Reality

Some Founders are Founders because they want to say they are Founders. (say that 3x fast!)

There is nothing wrong with wanting to be impressive and curate a specific image - if we can all be clear that this is what is happening. Then we can work from there (and maybe find a more effective way to make you impressive than starting a business).

However, there are some serious pitfalls to working with someone who primarily wants to impress others. These individuals tend to casually lie or say whatever they think you want to hear to manipulate situations in their favor. When they encounter what they perceive as failure, their first instinct is to shift blame away from themselves and avoid accountability.

These are, of course, very human responses to adversity. We have all performed these behaviors at some point and we all will do it again. But someone who chooses this as the default reaction is a no go.

So what do you think? Do you have the Green Flags? If so, reach out, I'd love to see how we can work together. (If I don't hear from you, I'll assume it's because you have the Red Flags - so thanks for that self-awareness)

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