Start With a Strong Team. (Or Not at All)
Picture a meeting room with a lot of windows, early evening, early Spring, the Oregon landscape darkening outside. Twenty or so angel investors (me included) sit on tables arranged like a big U, with a table in the middle for a projector, and a screen in front.
An entrepreneur has just finished his pitch. He’s a man about 50, clearly smart, articulate, and knowledgeable. He’s proposing something he’s done before, but with a new angle. He did a good job on the pitch and the business looks like it has potential. But that was before the question and answer period after the pitch. As he answers questions, he’s been cheated before, twice; people have stolen his ideas. He’s a man who’s been right repeatedly, and wronged repeatedly. He’s a loner.
Now, as he leaves the room, carrying his laptop and props awkwardly, when the door closes behind him, the room sits in silence.
One voice breaks the silence:
“Okay, is there anybody here who wants to join him. Raise your hand.”
There’s laughter, some remarks, some chuckling … but no hands are raised. We go on to the next pitch.
Startups are a team sport. Investors want teams. I liked this from Steve Blank: The Startup Team, explaining why the team is so important:
“In a perfect world you build your vision and your customers would run to buy your first product exactly as you spec’d and built it. We now know that this ‘build it and they will come” is a prayer rather than a business strategy. In reality, a startup is a temporary organization designed to search for a repeatable and scalable business model. This means the brilliant idea you started with will change as you iterate and pivot your business model until you find product/market fit.”
He concludes that with the obvious: so that’s why you need the team, not just the idea, not just the market, not just the plan. You need a combination of skills.
What skills? Well it depends on the industry you’re in, but generally great technology skills (hacking/hardware/science) great hustling skills (to search for the business model, customers and market,) great user facing design (if you’re a web/mobile app,) and by having long term vision and product sense. Most people are good at one or maybe two of these, but it’s extremely rare to find someone who can wear all the hats.
It’s this combination of skills is why most startups are founded by a team, not just one person.
Obviously my story above – a true story – is just one example. And of course there are exceptions to this like there are for every rule. But still, questionable teams don’t attract investors. Exceptional teams do.
All opinions expressed are those of the author, and do not necessarily represent those of Gust.
Written by Tim Berry
You might also be interested in
With startup growth up 61% since 2014 and more investment programs emerging, it can be overwhelming for founders to know just where to jump in. As the most startup-friendly accelerator on the planet, MassChallenge has helped 835 startup companies around the world, who have raised over $1.1 billion in funding and created over 6,500 jobs. We have seen startups at
Kathryn Schifferle, Founder and CEO of Work Truck Solutions, turned being a woman in work trucks into an oversubscribed $2.1 million round.
We sat down with Kathryn as she shared what her fundraising journey was like, the startup lessons she learned, and her advice to fellow founders, especially women. Here is what she had to say:
Early-stage technology company valuations are generally a crap-shoot. Bill Payne did a great post about this in October 2011. This post builds on top of his work, and attempts to shed additional light on the valuation process.
New founders may think that startup valuations work like this:
I figure out what the value of my existing company is I figure
Jason Rappaport, Founder and CEO of Squareknot, has raised $1.3 million to date — his first $500,000 round came after a single email, pitch, and lunch.
We sat down with Jason as he shared what his fundraising journey was like, the startup lessons he learned, and his advice to fellow founders. Here is what he had to say:
Kevin Klages, Co-Founder and CEO of Planitar, raised a $500,000 seed round after four pitches to angel investors.
We sat down with Kevin as he shared what his fundraising journey was like, the startup lessons he learned, and his advice to fellow founders. Here is what he had to say:
HK: Tell me a little about Planitar. How