What Startup Investors Look for in Your Team
In previous articles we’ve explored how do your research for finding suitable startup investors (link here and here) and how to reach out to them (link here), how to de-risk your startup to get investment (link here), and in this article we’re zooming in on the fit between your product and your team/the founders of your startup.
The number one criteria that any investor looks for is -team-; if you don’t have this, then nothing else really matters.
After all, there will always be other people trying to build what you’re doing (yes, no idea is a new one anymore) and they want to know why they should back you and not one of those.
Let’s break it down:
Solo vs Team
Firstly, if you’re a solo founder now — it’s going to be very, very hard to raise money. Things move so quickly, there is so much work to do, and it’s such an emotional rollercoaster — that you need to build it with at least one other person, ideally two more. If you’re on your own — you’re just an increased risk to an investor. They’ll also think you can’t convince others to join you which signals the idea is not good or that you’re not good at selling it — either way it’s a turn off.
Are you 1st time entrepreneurs or serial ones who’ve been through the journey and a bit older and wiser, even if some failed. Does any of the team have experience in the domain you’re targeting — what’s their background?
Domain knowledge & Edge
What do you and the team have that others don’t — are you a specialist in your field; perhaps completed a PhD in a research area which makes you at the forefront of the latest happenings in that field. Have you been working in a sector and seen a unique opportunity from the inside that would not have been spotted otherwise.
Has the team worked together before and know how to bring out the best in each other. How well do you get on and your skills complement each other. Does everyone have a clear area they’re going to focus on, and what are you like when both pitching the business… do you talk over each other a lot and interrupt or does it flow naturally. This is one of the reasons that husband and wife teams are pretty rare… they’re so closely entwined that they know how to push each other’s buttons which builds tension; which makes it risky as an investment.
Entrepreneurial Grit and Hustle
You might have a great team that work well together, with solid experience, and some edge and domain knowledge BUT investors will still want to know if the startup world is right for you. Many people do it for the wrong reasons and think it’s just a cool thing to do — without understanding how hard it is and the emotional and physical aspects of it all. You’ll need to show that you will stop at nothing to make this work and can take knockbacks, criticism, and anything else thrown at you. You’ll demonstrate you listen, adapt, and learn quickly. If you can’t take the pressure even at this stage — then you’re better off sticking with a normal job.
You can read more about the traits of a true entrepreneur in this article.
Understanding How to Get Startup Investment
Getting investment is, for many startups, an important milestone in their journey. However, many startups fail to get to their startup investments soon enough for them to scale their business. These startups fail to use specific strategies that that will ensure they get the attention of investors and stand out from the crowd. They struggle to understand the investors’ motivations to invest and, as a result, waste valuable time.
If your are in the process of raising investment this might help:
Click here for more details on how to get the right deck in front of investors.
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