Alumni News

by Laura J. Cole

What makes one startup soar while another stalls? Two veteran investors reveal the traits in a founder who—rather than a startup’s product, profit, and market fit—can make or break a venture.

Knowing whether or not to invest in the next big thing takes a heap of savviness, a pinch of nerve, and a dash of luck. You need to see not just the market, but also how a product could redefine it. You need to see the demand that drives revenue today and the potential to scale tomorrow. And you need to trust your instincts on whether the moment is right for a given solution. It’s a formula venture capitalists Damien Petty ’93 and Stefanie Thomas Martin ’03 know well. 

For more than two decades, Damien has assessed startup technology companies, cutting his teeth investing in Skype, where he represented the founders from their first investment through the company’s $8.5 billion sale to Microsoft. Today, as a partner for LA-based Morpheus Ventures, he focuses on quantum and high- performance computing companies, such as Ten63, which combines generative AI and physics-based models to develop first-and best-in- class therapeutics. "For us, it’s critical to know who’s creating something truly new versus what’s come before," says Damien, who parlayed a love of science, a physics degree from the University of Virginia, and an MBA from UCLA into a knack for investing in deep tech. 

Similarly, Stefanie turned an entrepreneurial upbringing, a Wharton marketing degree, and an MBA from the University of Michigan into a passion for impact investing. As an early-stage investor for Impact America Fund, she gained recognition from Fast Company as part of a rising cadre of Black women venture capitalists challenging industry norms by tapping into the $3.4 trillion buying power of multiethnic consumers and investing in minority- and women-led businesses. 

Now a partner at the DC-based Zeal Capital Partners, Stefanie continues to support equity-minded companies making an impact in financial services, health care, and the future of work. "We focus on entrepreneurs who are really mission-oriented and building big businesses with massive impact," says Stefanie. For both Damien and Stefanie, business models, market size, and scalability matter. But the single most important factor in knowing when to invest? The character of the people at the helm. 

"We focus on founders first because a company’s success—its ability to handle challenges and solve problems—all comes down to the grit and determination of the founding team," Damien says. Here, these two veteran investors share the traits they’ve learned to look for in a game-changing founder.

Knows Their Limits 

Entrepreneurs need to understand their product, why it’s necessary, and how it fits into the market. But they also must recognize their shortcomings and blind spots, and know how to address them. "In the early stages, we look for founders who really know the nuances of the problem," says Stefanie. "Typically, they have lived through it themselves and gained insight from that experience. But they also need the self-awareness to know where they lack skills or knowledge, and have the ability to bring in the right people to fill those gaps." 

Stefanie saw both in Helen Adeosun, CEO and cofounder of CareAcademy, an online platform that helps train the growing number of caregivers for the elderly in the United States. "Helen knew the problem intimately but didn’t have the technical expertise to build the platform," says Stefanie. "She was able to effectively recruit people from competing companies, which was a strong signal of her leadership and ability to attract the right talent." For Stefanie, this kind of self- awareness isn’t a soft skill—it’s a critical business skill that shows founders can build strong teams and successfully scale over time.

Invents the Impossible 

Steve Jobs, cofounder of Apple, is often remembered for his genius in design and marketing but even more, perhaps, for his ability to convince others to see possibilities they couldn’t otherwise. Bud Tribble, one of the top software developers for the company, called it Jobs’s "reality distortion field," or his talent for creating his "own new world through sheer mental force." "That’s what we’re looking for," says Damien. "We want a founder who’s got this distortion field around what they’re trying to build. It’s not just, 'I’ll figure out how my product fits into the market.' It’s, 'I’m going to create the market." 

Damien found that quality in Chad Rigetti. Considered a pioneer in the field of quantum computing, Chad created Rigetti Computing, now valued at $4.4 billion. In 2021, the company unveiled the world’s first scalable multichip quantum processor. But when Rigetti launched the company in 2013, commercial quantum computers were still in their infancy, and IBM was years away from offering one on the cloud. 

"The sector was still emerging," says Damien. "We invested in him in 2020 because Chad could explain complex science in very basic terms, show exactly how it delivered value, and lay out a clear vision of where the company would be in three, five, or more years." In emerging sectors like quantum computing, where uncertainty runs high and the stakes can be even higher, a polished pitch will pique interest. 

But Damien says he must probe deeper, searching for leaders with conviction, a clear technology road map, and the kind of vision powerful enough to bend reality. That combination is critical in turning a good idea into a successful, paradigm-shifting company.

Adapts and Excels 

In every industry, markets shift. Technologies change. Ideas flounder or fail. Founders need to navigate all the turbulence and ensure the company keeps moving forward. For Stefanie, that means finding leaders who are able to pivot and persevere. She’s seen that quality in Wemimo Abbey and Samir Goel, cofounders of Esusu, a $1 billion company that today helps renters build credit and property owners find reliable tenants. When their original idea, a peer-to- peer lending platform, wasn’t gaining the traction they hoped, they didn’t fold. Instead, they dug into market research, uncovered an urgent need, and reshaped their model. 

"That’s when it became a national brand," says Stefanie. "They stuck with it long enough to find the right opportunity, and that persistence turned Esusu into a billion-dollar business." For Stefanie, Wemimo and Samir’s story illustrates a universal truth about entrepreneurship: Setbacks are inevitable, but failure is optional.
Every company will face obstacles and naysayers, she says. What distinguishes successful founders isn’t avoiding them, but pushing past them with creativity, grit, and persistence.

Inspires Greatness Passion. Clarity of vision. 

The ability to bring people along. These are not just vital qualities for a founder to possess in the boardroom or when trying to sell potential investors on a company. They also are necessary in all areas of running a business, especially in defining a corporate culture that inspires future and current employees. As an example of someone who does this well, Damien cites Henry Ludlam, founder of Goodstack, a fintech platform that helps corporations by vetting and managing charitable donations while also supporting nonprofits by providing access to technology, resources, and fundraising opportunities. 

Damien recalls listening to Ludlam during a panel: When asked how he attracts high-quality talent who share his commitment to his mission, Ludlam responded simply, "I don't." Instead, he said, his job is to find talented, capable employees and then begin the hard work of making them care about the mission. "Ludlam sees himself as the primary evangelist for what he’s building," says Damien. "When we see that in a founder, we really get excited and want to work with them." 

Whether backing an early-stage company that’s still unproven or a breakthrough technology still searching for its market, Damien and Stefanie find these types of qualities in prospective founders energizing. But even with all of these unique core traits, they still expect entrepreneurs to have an appetite for improvement. "The business model and the market are important factors that we look at, but it’s not just about the company evolving and growing," says Stefanie. "Investing is about finding people and teams that can evolve and grow as well. That’s why when I meet a founder, the first question I ask myself is always, 'Can this person go from scrappy startup founder to executive and CEO?'

Read more stories in The Term.