What Investors *Really* Want from Founders-and What They…
8 min Read Time
Founders who have built companies themselves – and later invested in others – see the pitch process through a different lens. Jakob Bach knows both sides: as a founder, he pitched; as an investor, he evaluates pitches. The things that never appear in any pitch deck – but decide whether you get a yes or a no. 92 percent of startups fail within their first three years. Fewer than 1 percent of pitches result in investment. And 70 percent of investors’ decisions hinge not on numbers, but on the quality of the team.
The Key Takeaways
- Explain – not sell: The best founders don’t sell; they explain. Investors rely heavily on signals that are difficult to quantify.
- Biggest dealbreaker – perfection: Every startup has problems. Hiding them destroys trust instantly. Openness about mistakes builds more credibility than flawless pitch decks.
- Pitch mistake #1: Trying to impress with TAM figures without explaining your specific path to capturing that market. Bottom-up always beats top-down.
- Start with your own problem: The strongest pitches begin with the founder’s personal pain point – not the customer’s.
- Train investor literacy: “Investor readiness” is learnable. The most effective way? Make small angel investments yourself.
The Invisible Checklist
Every Investor has an official checklist: market size, team, traction, unit economics. These items appear in every guidebook and accelerator presentation. What’s missing? Investors make a large portion of their decisions based on signals that are hard to quantify.
How does the founder respond to an uncomfortable question? Does she know her weaknesses – and can she discuss them without slipping into defensive mode? How does he talk about his team when team members aren’t in the room? These signals aren’t “soft skills.” They’re hard indicators of leadership resilience – the ability to steer a company through crisis. Because that’s exactly what investors fund: not the idea itself, but the founder’s capacity to execute it under pressure.
After dozens of pitches on both sides of the table, I can say: the best founders don’t sell. They explain. And they listen. They answer the question that was asked – not the one they wish had been asked. It sounds basic, but it’s the difference between a pitch that sticks in memory and one forgotten ten minutes later.
The Most Common Mistake: Pretending to Be Perfect
The biggest dealbreaker for me as an investor isn’t a bad month or a missed metric. It’s the inability to openly address problems. Every startup has problems. If a founder presents everything as flawless, I know immediately something’s off – either they don’t recognize their challenges (bad), or they’re deliberately concealing them (worse).
The strongest pitches I’ve seen began with a problem – not the customer’s, but the founder’s own. “We spent three months building the wrong thing. Here’s what we learned.” That kind of honesty builds far more trust than any hockey-stick chart. Why? Because it signals learning agility – the single strongest predictor of long-term success.
A concrete example: I once met a founder who voluntarily disclosed his highest customer churn rate – not because he had to, but to show how he’d used that insight to build a better onboarding process. That grabbed my attention more than any revenue forecast. Because it revealed a founder who solves problems – not hides them.
The TAM Trap: Why Top-Down Market Sizes Impress No One
Pitch mistake #1: trying to wow investors with TAM figures. “The global market for X is $47 billion.” So what? What does that say about your startup? Nothing. Every investor has seen that slide a hundred times – and skips it. What matters isn’t the total market size, but your concrete path to capturing a piece of it.
Bottom-up beats top-down. “We currently serve 120 paying customers at an ARPU of €890. Our sales cycle is 23 days. With our current team, we onboard 15 new customers per month. In 18 months, we’ll hit €2 million ARR.” That’s a market-sizing argument that convinces – not because the numbers are huge, but because they’re credible and traceable. An investor wants to understand how you’ll get from A to B – not how big C might theoretically be.
The flip side: some founders become so enamored with their bottom-up math that they forget to articulate the bigger vision. Balance is key: show me how you’ll survive the next 18 months and why this could become a €100-million business in five years. Both – not one or the other.
What I Wish I’d Known Earlier – as a Founder
When I was raising capital myself, I thought it was all about the perfect presentation – the flawless metrics, the compelling story. Today I know it’s about fit. Not every investor is right for every startup – and timing matters. A “no” often doesn’t mean “your startup is weak,” but rather “it doesn’t align with my current portfolio” or “I don’t yet grasp your market well enough.”
My top advice to founders fundraising now: vet your investors as carefully as they vet you. Ask about their failed investments. Ask how they behave in crises. An investor who’s a friend in good times but silent in tough ones is the wrong partner. Smart money means more than capital – it means support when things get hard.
Reality in the DACH market: according to EY’s Startup-Barometer, €8.4 billion flowed into German, Austrian, and Swiss startups in 2025 – a recovery after the funding winter. But expectations have shifted. Investors no longer finance growth at any cost. They finance efficient growth – companies that generate more revenue per euro invested than the average. For founders, that means your pitch must prove not just that the business is growing – but that it can grow profitably.
As Tom Wehmeier, Partner and Head of Research at Atomico, put it: “Investors no longer finance growth at all costs. They finance efficient growth – companies that generate more revenue per euro invested than the average.”
Source: State of European Tech 2024, Atomico
The Three Investor Archetypes – and How to Spot Them
Not all investors operate the same way. From my experience, there are three core archetypes – and your pitch must align with the right one.
The Thesis Investor holds a clear investment thesis: specific sectors, stages, or business models. If your startup doesn’t fit, pitching – even brilliantly – is wasted time. The upside? If you do fit, you gain a partner who deeply understands your market and delivers real strategic value. Pre-pitch research is critical here: study their portfolio companies, read their LinkedIn posts, internalize their thesis.
The Opportunist casts a wide net and reacts to compelling opportunities. He lacks a rigid thesis and instead seeks exceptional teams and strong momentum. Here, personal impression outweighs everything else. The downside? Less industry expertise – and less support during crises, because he doesn’t know your domain deeply enough.
The Operator-Investor has founded companies himself and invests from lived experience. I count myself among this group. The advantage? He grasps operational challenges firsthand. The risk? He may project his own experiences onto your situation instead of listening. The best pitch for an operator-investor shows: “I know what you’ve been through – and I’m doing it differently, because our context is different.”
Training Investor Literacy: The Underrated Lever
The single best way to understand the investor perspective? Invest yourself – even small angel investments of €5,000 or €10,000 fundamentally shift your perception. Suddenly, you’re sitting on the other side of the table – and realize: the questions you once dismissed as tedious are, in fact, the most important ones.
What my first angel investment taught me: I backed a startup whose founder emotionally convinced me during the pitch. The numbers were solid, the team likable, the vision inspiring. Six months in, it emerged that the founder had deliberately omitted a critical issue – not lied, but left it out. The investment wasn’t lost, but trust was damaged. Since then, I ask every founder in every pitch: “What’s the biggest risk we haven’t discussed yet?” Their answer reveals more than any slide.
For founders in the Reboot Germany context, there’s an added layer: the DACH market follows its own rules. German investors are more conservative than U.S. VCs, weigh profitability more heavily than growth, and expect greater operational substance in pitches. A pitch that wins in San Francisco will fail in Munich if it can’t clearly answer: “When will you be profitable?”
The Unspoken Pitch Checklist
Authenticity beats perfection: Investors spot facades instantly. Openness about failure builds more trust than polished decks. Show your learning curve – not just your results.
The invisible checklist matters most: Beyond hard KPIs, investors assess how you handle pressure, your self-awareness, and how you speak about your team. Your reaction to the third tough question says more than your revenue growth.
Investor fit isn’t one-way: Founders should vet investors as rigorously as investors vet founders – especially for crisis moments. Check references, speak to portfolio founders, and ask directly about failed investments.
Explain – not sell: The strongest pitches come from founders who listen – not just present. A dialogue beats any pitch deck.
Bottom-up – not top-down: Show your concrete path to €2 million ARR – not the €47 billion TAM number. Clarity trumps spectacle.
Choose the right timing: Not every moment is right for fundraising. If metrics aren’t yet strong, wait three months and return with better numbers – rather than entering negotiations from a weak position. Time is a resource founders consistently underestimate.
What Changed in 2026
The Funding Winter of 2023/2024 permanently reshaped the investor landscape. The era where a compelling narrative and a charismatic founder sufficed is over. Today, three things matter above all: demonstrable product-market fit, sustainable unit economics, and a business model that could survive without venture capital. That sounds paradoxical – especially while raising VC. But that’s precisely the point: investors want to back companies that don’t need the money to survive – only to accelerate.
This holds especially true in the DACH market. German investors learned from the Funding Winter that valuation discipline matters more than deal volume. Average pre-money valuations have dropped 30-40 percent from their 2021/2022 peak. That’s bad news for founders relying on inflated valuations to sustain their story – but great news for those building real businesses.
The good news? For well-founded, profitably growing startups, the market is stronger than ever. There’s less competition for investor attention, since “hype startups” have vanished. And the investors still active are hunting seriously for the best companies – not chasing FOMO-driven deals. Anyone raising capital in this environment gets not just money, but an investor who chose deliberately.
Frequently Asked Questions
Further Reading
- Jakob Bach – Trusted Voice Profile
- All Trusted Voices in the MBF Media Network
- Startup Comeback: Germany’s Founder Scene Leaves the Funding Winter Behind
Header Image Source: Pexels / RDNE Stock project
