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Here's What the Co-Founder of Zillow Says Investors Really Want to Hear From You Spencer Rascoff demystifies what the other side of the table is thinking in pitch meetings.

By Brad Klune

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"What do you look for when investing in a startup?" It's a critical question for entrepreneurs looking to launch or grow a business.

We asked Spencer Rascoff, co-founder of Zillow and Hotwire and General Partner at 75 & Sunny, what he looks for in a business and in an entrepreneur to get his backing and support. Here are five critical characteristics that he and other investors are looking for when a new idea comes their way.

1. You have grit

"I want that founder ready to run through walls to make something successful," says Rascoff. "A chip on their shoulder."

This is the ability of the founder and team to persevere through the inevitable challenges and setbacks that come with starting a business. It's that "never say die" attitude that will help them push through the tough times.

Make sure you have the fire inside of you.

Related: Book a one-on-one video call with billion-dollar founders

2. You are a perfect fit for this idea

"There is no such thing as a great founder, there is only a great founder for a specific idea. So I want that founder to think they were put on this earth to solve that problem," says Rascoff.

The founder and the idea need to be a perfect match. The founder needs to be the right person to execute the idea and bring it to life.

You need to exude the fact that you were born to build this company.

3. You know how to fundraise

As Rascoff says, "When you make an early-stage investment in a company, you are really betting that company will be able to raise future rounds." The ability to raise money is a key indicator of a startup's potential success. Master the art of sales — great entrepreneurs aren't just people with big ideas, they're great at communicating why those ideas matter.

4. Your idea is big

This is all about having a grasp on the size of the market your startup is targeting. As Rascoff asks, "Is it a feature, or is it a company?" A big market means more potential customers and more potential revenue.

5. Ability to recruit

"Missionaries recruit followers. Recruiting is critical to a company's success," says Rascoff. A founder who is passionate and dedicated to their cause should be able to attract others to join their team.

Keep these five critical characteristics that investors look for in startups in mind as you're building your business, and you'll be well on your way to impressing us and securing that investment. If you want to dig deeper into one or all of these tips, you can book a one-on-one video call with Spencer Rascoff today.

Brad Klune

Entrepreneur Leadership Network® VIP

Head of Business Operations

Entrepreneur Leadership Network Contributor. Head of Business Operations at Intro. Former leadership at Uber and Instawork.

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