> 1. your company should actually do something important/valuable. Solve an important problem etc.
There are for sure examples of companies who are not 'solving an important problem' (at the time of the company being formed). It would be interesting for someone to compare funded companies that met this criteria that were successful (that would have to be defined as well) vs. not and 'pie in the sky maybe maybe if it works will hit it big'.
But right off the top Airbnb as envisioned and as it started was not solving any important problem or really doing anything valuable. At the start I mean (when pitched to investors note Fred Wilson famously passed on this after Paul Graham even pushed him to invest) not what airbnb became (which is what many investors go on).
The Automobile when it started to be popularized didn't solve an important problem that problem was already solved by horses and the early automobiles had to develop over many many years into a state where they became valuable. At the start they were not and investing on that basis would not have been wise (other than 'maybe they will end up allowing people to do this and that vs. using a horse').
Uber ditto (but less so) than Airbnb that problem was solved by cabs in most places. (Will agree this is a weaker point than Airbnb).
That said with respect to the above points 1 to 4 probably a fifth is needed. That would be being able to explain to an investor why your solutions works for a problem they don't even agree is a problem or understand. Once again using airbnb many investors (including Fred Wilson and for that matter myself) couldn't understand why in the world someone would let a stranger use their house makes no sense you have person items and what not just didn't seem to fly. However people of a different age group think differently so how do you explain to the investor (who is not the same peer) why the idea makes sense?
There are for sure examples of companies who are not 'solving an important problem' (at the time of the company being formed). It would be interesting for someone to compare funded companies that met this criteria that were successful (that would have to be defined as well) vs. not and 'pie in the sky maybe maybe if it works will hit it big'.
But right off the top Airbnb as envisioned and as it started was not solving any important problem or really doing anything valuable. At the start I mean (when pitched to investors note Fred Wilson famously passed on this after Paul Graham even pushed him to invest) not what airbnb became (which is what many investors go on).
The Automobile when it started to be popularized didn't solve an important problem that problem was already solved by horses and the early automobiles had to develop over many many years into a state where they became valuable. At the start they were not and investing on that basis would not have been wise (other than 'maybe they will end up allowing people to do this and that vs. using a horse').
Uber ditto (but less so) than Airbnb that problem was solved by cabs in most places. (Will agree this is a weaker point than Airbnb).
That said with respect to the above points 1 to 4 probably a fifth is needed. That would be being able to explain to an investor why your solutions works for a problem they don't even agree is a problem or understand. Once again using airbnb many investors (including Fred Wilson and for that matter myself) couldn't understand why in the world someone would let a stranger use their house makes no sense you have person items and what not just didn't seem to fly. However people of a different age group think differently so how do you explain to the investor (who is not the same peer) why the idea makes sense?