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Entrepreneurship truly is the new American dream. A growing rejection of traditional 9 to 5 jobs combined with easy access to useful business-building tools is ensuring that the future of the business creation in the US remains bright.

The increase in entrepreneurs has naturally fostered strong growth in venture capital alongside it. Last year, the industry broke records for revenue, the number of megafunds, and the amount spent on acquisitions. With so much competition and an increasing number of businesses to choose from, new venture capital investors have their work cut out for them when it comes to choosing which companies to support.

While doing thorough research is obviously necessary, many longtime venture capitalists will tell you that a big part of choosing investment targets comes down to betting on companies led by founders with grit. However, because grit is a complex character trait, it isn’t always easy to identify. To determine if an entrepreneur has this ever-so-important quality, look for the following clues.

1. They are passionate.

Passion is central to grit because it motivates entrepreneurs to keep moving forward when problems arise and setbacks occur. Building a successful business is a long-term, arduous process that demands time and full commitment. In these situations, the prospect of money or notoriety may not be enough to keep an entrepreneur from feeling the intense burnout that can often lead to failure. Those driven by a passion for what they’re creating and a deep belief in its impact are more likely to push through difficulty in pursuit of success.

business passion

It’s not hard to identify passion. Look for founders who clearly demonstrate belief in their own venture. Passionate entrepreneurs are compelling storytellers whose enthusiasm for their company is evident in the way they speak about it. Passionate entrepreneurs are also the kind of leaders who choose to use their failures as a tool to improve their business. They learn from their mistakes and move on, rather than giving up.

2. They have courage.

While it could be argued that anyone who chooses to start their own company has a unique kind of boldness, entrepreneurs with grit have a straightforward courage that allows them to make difficult decisions, accept responsibility, and face stressful tasks head-on. Founders with courage aren’t afraid to cold call strangers, let go of employees who aren’t a good fit for their team, or even start a project over from scratch.

You can recognize courageous entrepreneurs by their performance history. Consider asking them questions about the choices they’ve made as leaders that have led to meetings with investors. Founders who show a tendency to logically evaluate their company’s situation, trust their gut, and make hard decisions when necessary likely have the courage it takes to build a successful company.

3. They can take criticism.

To establish a company that can withstand the ups and downs of the market, a founder must be able to listen to opinions from people qualified to give them. A gritty founder worth the investment will understand that constructive criticism from investors and advisors is not a reflection on their abilities or a personal attack, but a tool to be used in the interest of building a better product or a stronger company. Founders with grit have some emotional distance from their company; their company is vitally important to them, but they have the strength to accept criticism objectively.

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To determine if an entrepreneur has this ability, look for someone who is self-aware and demonstrates humility when pitching. These people listen to feedback with an open mind when it is given, including from members of their own team. Having a good team can also indicate the founder can take criticism. People who lead teams that work well together are likely to be better at listening to others’ ideas in the interest of improving their product or service. This quality is critically important in a quickly changing consumer market where ideas often must be evaluated, refined, and reapplied quickly in order for a company to succeed.

4. They demonstrate perseverance.

At first glance, the line between grit and plain perseverance can be difficult to distinguish. However, the important distinction between the two is that founders with grit keep going when the going gets tough because they have all of the qualities listed above. They’re not just blindly pursuing success without a strategy.

It isn’t difficult to determine if a founder’s choice to go forward in the face of challenges is rooted in grit. To do this, look for entrepreneurs who are motivated by something beyond financial gain. They must be passionate, well-rounded people supported by strong teams and strong ideas. They are motivated by the worth of their product or service and their own unshakable belief in what they aim to accomplish. Determined people who have put in enough time, effort, and research to earn an audience with investors are the only kind of founders worth your investment.