If you’re like most founders seeking funding, you’re busy checking boxes to make sure your startup is the perfect storm to attract investors. Game-changing idea? Check. Scalable model? Check. Thriving user base? Check.
But if you just rounded up the first five people you found at an entrepreneur meetup and hustled them into a co-working space to build your company, you may run into some trouble landing an investment.
Contrary to popular belief, VCs aren’t always looking for the next big thing. They’re looking for the next big team.
The team is the foundation of any successful startup, the fixed point from which all ideas and developments originate. Without a strong foundation, a startup will be blown and battered by the changing environment and, ultimately, crumble.
When I met with a particular startup in the mobile video space, I immediately knew that I had to invest. The founding team was comprised of a serial entrepreneur, a CTO who had scaled a small business to hundreds of millions in revenue and a talented business development person with relevant industry experience.
I recognized right away that they were an all-star team. As I got to know them, I realized they also had a natural chemistry, mutual respect and an acute awareness of one another’s strengths and weaknesses.
Unsurprisingly, this company has become a standout in our portfolio, but what exactly does it take to build an all-star cast? Here are five things I look for in a winning team:
1. Impressive talent.
Late-stage companies generally have the processes and personnel in place that allow each business unit to stand on its own. But in the early stages, each member of the team plays a critical role. You need a team of experts who can sell, market or design circles around their peers. When I see a team jam-packed with impressive individuals, I know I’m onto a winner.
2. Mutual respect.
Even if you and your co-founders are completely different people with diverse backgrounds and skill sets, you need to be able to find common ground and cultivate a spirit of deep respect. Mutual admiration creates an environment where you can communicate, overcome problems quickly, work toward shared goals and share in your mutual success.
There’s a stark difference between founders who are doing it for the first time and founders with multiple companies on their résumés.
Michael Todd, co-founder and CTO of Victorious, is a perfect example of someone who impresses with his ability to leverage past experiences. Regardless of the time crunch or changing conditions, Mike is always calm and keeps his end goal in sight. This comes from having vast experience -- anyone can tell it’s not his first rodeo.
The difference between an A team and a B team doesn’t come down to the quality of the idea it’s pitching; it’s whether the team can carry that idea to success. Plans, trends and challenges change all the time, so a team that can adapt together and follow the customer (rather than clinging desperately to the original idea) will be suited to startup life.
You can tell immediately if a team has a history of working together. The founders have chemistry, have unspoken understanding and complement one another’s strengths.
Bitium is a great example of this. Its founders worked together for many years at Fastpoint Games. When I met the company for the first time, everything ran like clockwork because everyone knew one another’s working styles inside and out, allowing everyone to focus on the tasks at hand rather than getting distracted by interpersonal dynamics.
So before you go pitching your awesome idea, make sure you have the right team supporting it. You need true rock stars with experience, history and chemistry to build a successful business. That’s what’s going to make your startup stand out to investors.