Investing in companies can be an exhilarating journey, especially when you meet passionate startup founders who are deeply committed to their vision. Their enthusiasm is contagious, and it’s easy to get swept up in their dreams and goals. However, this is precisely the moment when investors must adopt a critical mindset and not let emotions dictate decision-making.

Many investors tend to overlook some of the most crucial aspects of a startup when evaluating an opportunity. While passion and vision are essential, they do not guarantee success. One of the key factors I consider when assessing founders is their prior experience. Have they built and run companies before? Have they faced failure, and more importantly, what lessons did they learn from those failures? Understanding how they are approaching things differently this time can provide valuable insight into their potential for success.

Beyond the long list of due diligence documents, investors must also examine the diversity in expertise within the founding team and whether they have the right advisors around them. A well-rounded team with a strong support system significantly mitigates risk.

At GSA Ventures, we are particularly excited about the pipeline of startups emerging from Global Startups. We often refer to this strategy as “money ball”—these founders may not fit the stereotypical mold of a young, fresh-out-of-college entrepreneur, but they bring real-world business experience, often with a few grey hairs to show for it. While we support all startups with a global mindset, we recognize that backing founders with market experience, whether in North America or elsewhere, reduces risk. Entering mature markets requires skill, but these can be learned with the right support and guidance.

Startups from emerging markets often fail due to a lack of resources and guidance. However, those who have endured these challenges, learned from them, and are now entering mature markets with the right support are far more likely to succeed.

A study published in Harvard Business Review sheds light on the importance of experience. Researchers analyzed data to identify the most successful startups (the top 0.1% based on five-year growth) and found that the average startup founder was 45 years old when they launched their company.

This finding, as cited in an Entrepreneur article titled The Most Successful Startup Founders Are This Age, Study Finds (And No, It’s Not Early 20s), reinforces the idea that experience matters. While young entrepreneurs often grab headlines, it is those with substantial business experience who tend to build the most successful companies.

Mitigating risk as an investor involves looking beyond excitement and passion. A founder’s experience, their ability to learn from past failures, and the expertise surrounding them are key indicators of potential success. At GSA Ventures, we believe in supporting founders with a global mindset and ensuring they have the best possible foundation for success in mature markets.