A venture capitalist shares the qualities that can make a founder worth investing in

For some founders, raising a round of venture capital can feel like a milestone. But getting the check is only part of the equation. Choosing the right backer can shape the company long after the fundraising round closes.

Shravan Narayen has seen that relationship from both sides. After working across product and go-to-market roles at startups including C3 AI, Confluent, and Snowflake, Narayen moved into venture capital—a shift he describes as a “happy accident.”

As a general partner at venture capital firm IVP, he has been part of the IVP teams backing companies like Anthropic, Perplexity and Baseten. His advice to founders: “Don’t over-rotate toward what VCs are thinking. That’s just going to make you exhausted.”

Instead, he says founders should focus on understanding their market deeply and finding investors whose approach and culture align with how they want to build.

In a conversation with Founder Brew, Narayen shared what he looks for in founders—and what founders should look for before taking a VC’s money.

This interview has been edited for length and clarity.

What do founders you ultimately bet on have in common?

They always have a few characteristics in place. One is that they will just take all the punches possible. It’s an incredibly tough, thankless job. But they are so deeply committed to what they’re trying to do that they’re going to find a way to make that happen. A second part that I personally resonate with is people who are true students of the market and the industry and understand what it takes to maybe succeed.

What separates a technically strong founder from one who can actually build the company?

They can go as high level as painting this incredibly compelling vision of the future, and as low level as being able to deeply understand everything that’s happening within a company across not just the product but the go-to-market, finance, all that sort of stuff—it’s just very, very, very difficult to run to run a company.

When you’re having conversations with these founders, it comes through very clearly the ones who operate in that similar way of “I’m going to be able to tell a VC the vision” and “I’m going to be able to tell a prospective joiner of the vision,” but when that person joins the company, I’m going to go toe to toe with them on even the most minutia of decisions.

How much do you need a founder to be fully formed in that first meeting?

If someone tries to come across as a fully perfect package, they’re just not someone that I resonate with as much. I prefer the honest conversations, both pre-investment when you’re diligencing and learning more about a founder, but also post-investment. It makes it so much easier to partner with and support them. I am not looking for a “perfect package” in any way, shape, or form, but someone who is fully aware of what’s working and what’s not working, and can have that conversation, and is open to learning.

You’ve backed companies across AI, enterprise software, and infrastructure. What patterns did you see early on that made you believe these companies had the potential to become very large?

We care a lot about customer obsession and what I describe as “changed behavior.” One of the things that we always like to ask when we’re digging with customers is “How are you using the product in a way that it was never intended for that is borderline breaking the product?” That shows they’re so desperate for more from this product and from this company that they’re willing to use it in ways it was never designed for. That’s another form of customer obsession.

One of our favorite quotes is “I can’t imagine life without this.” We love products that help people get promoted. If you’re a customer and you’re buying a product, and as a result of buying it, it’s been so transformational for your organization that customers get a lot more credit that they’re getting promoted, That’s another great sign, especially in enterprise software.

What do the best founders understand about their market earlier than everyone else?

They are very comfortable with the fact that they are early to it.

Founders fundamentally are bringing forward the future that they wish to see. Some are able to bring it forward in the completeness of their vision, and some aren’t. But you have to find people that align with that. One of the things that we certainly see a lot is that they’re bringing forward that future in some way, shape, or form.

What do founders misunderstand about how investors make decisions?

I really do not think any founder should ever try and back-solve for “What does an investor want to hear?” That may be one of the things that they sometimes misunderstand is that they feel that they need to use certain code words or phrases to resonate with investors, or they feel that they need to sound same a certain way or look a certain way. I don’t think that’s the case at all because all that’s going to be is inauthentic to who you are, and you’re less likely to succeed.

Some founders may incorrectly believe that they need to sound a certain way, look a certain way, say a certain thing. And if you are self-selecting into the investors who expect you to sound, look, feel, be a specific way, those are probably not the people who are going to be in your corner when things don’t go well.

When a founder gets a no from an investor, what does that actually mean?

There is always the possibility of just a no, and it’s just not going to be a fit for some reason. One, it could be a sector where that just doesn’t match up with where an investor is paying attention and wants to dig into. It could be a different investment expectation around what the founder is trying to accomplish versus what the investment firm needs.

Every founder should understand an investment firm’s and VC strategy based off their fund size, based off the investments they’ve done, how much they followed on into companies versus not—that tells a lot about what they’re thinking about and how they’re acting.

What’s something founders should be more willing to ask investors during the fundraising process?

They should more proactively ask for references. I think it’s a good thing. I also think that they should, as with anyone, they should do their own back-channel references.

Spend even more time talking behind the scenes, or through direct connections with founders who have previously worked with those investors before.

Once the deal is inked, what should founders expect from their investors in the post-investment relationship?

Partnering with the firm, not just the person. You’re going to spend the majority of your time with the point person from your firm. But sometimes that changes. Increasingly, people are moving between firms and venture, etc., and so it’s important to have a proper relationship with the firm overall.For me personally, the entire point of the job is to work with founders post-investment. That is the fun for me. That is the entirety of what I’m trying to do. If all I was doing was making investments and not getting to work with founders afterwards, I wouldn’t be doing this job…Fundamentally, it’s all about being in service of founders who are doing amazing things.