What Does Ben Horowitz Look for in an Investor?

Ben Horowitz says the thing founders do not have is knowing how to do the CEO job. The founders he works with who have not already run giant companies do not know it, and the skill is complicated. They still have to hire for jobs they have never done. He had never been a CFO. He did not know what a control structure was or how to talk to Wall Street. He compares that hire to choosing a Japanese interpreter when you do not speak Japanese: they all sound good. People also have their own career ambitions, and Mark Zuckerberg may be offering the team a billion dollars to leave. Founders who fail at this often hit a crisis of confidence. They know they do not know what they are doing, they know it is hurting the company, and they still have to decide. Hesitation makes the company nervous, slows the work, and creates politics because other people fill the gap.

An investor who can help with that is invaluable. The two things he looks for are someone who can give the company momentum in hiring and in reaching the next round, and someone the founder can work with who actually knows the job and is helpful. Every angel and every venture investor will offer advice, including people who have never been CEO and who sound completely sure. One line he heard 27 times was to hire A players. That is not an insight. Useful advice is rarer than confident advice.