Is your team credible and investable?
With a successful MVP (Minimum Viable Product), a patent or two and LoL’s (Limits of Liability) from potential customers, it should be fairly easy to raise money from investors – you’d think so wouldn’t you?
But the one element missing from the above, is your team – is it up to the task of turning your fledgling company into a major success – potential investors will look at your team with a hard-nosed and critical eye.
What exactly will they be looking for in a team to take forward a business concept and turn it into a successful company?
The answer is, it’s a blend – a blend of skills, experience, knowledge, values, culture and network, and, it’s very unlikely that the person or team that founded the business has this blend without additional external resource
Some examples of the good and the bad, starting with the bad:
4 young scientists found a company – no CEO candidate amongst them; age means little experience; none have founded a company before; age again means their network will be weak; little financial acumen…….not good
1 young engineer creates a cool piece of new tech and turns it into a company – even worse than the 4 above, because he or she is on their own, carrying the weight of the world on their shoulders (risk of burnout; what happens to the company if they fall ill)……also not good
So what does good look like?
3 physicists found a company – having seen the path a startup should take on the Startup-Gurus website, and having understood the need to do a skills gap analysis (also from the Startup-Gurus website), they do the following:
1. They recruit some investing NEDs who bring early-stage money to the company which gives them the match funding they need for their grant application. BUT crucially it also brings experience and network to their business in the sector they operate in. Typically this might be a CFO, a Sales and Marketing Person and perhaps a Manufacturing / Logistics and Supply Chain expert.
2. As things progress and leveraging the skills and network of their NED’s, they build out an advisory board filling more of the skills they’ve identified as missing from their team make-up.
3. With the Grant money in, the move to bringing in a full time CFO – someone with expertise in startups and fund raising and with a background from their industry.
4. At this stage, if an obvious CEO / COO candidate has not emerged from the 3 of them, then they might also choose to recruit one who can led the company commercially. Someone again from their industry sector who has been “round the block” a few times. If a candidate for CEO has emerged from the 3 then they should also find a mentor or coach for this person to help round out their developing skills and provide that person with a sounding board for difficult decisions.
Using the above as a simple example – this company is now much more credible in front of potential Angel or VC investors, and the blend they’ve created will mean they are more investable.
Summary
Put bluntly the risk of youngsters making mistakes as the business develops can be substantially mitigated by bringing onboard NED’s and Advisors at an early stage, and then recruiting heavyweight CFO / COO / CEO employees to achieve that exponential growth and most importantly to attract the right calibre of investors.
Contact us today if you need help or advice on how to build an investable and reliable team.