A startup company, like a small child, needs years of steady nurturing, encouragement, and discovery of what the final product will become.  Unfortunately, there’s no training for first-time parents.  However, a startup company has the benefit of getting nurtured by an experienced set of managers and decision makers – ones who can use their years of experience to steer a small business on the right course.

 

Do you think a venture capital firm would want to invest hundreds of thousands, possibly millions, into a small startup company with inexperienced managers?  You may as well have a landlover entrepreneur build a cruise vessel, exclaim himself as captain, and have his ditch digging colleagues come on as his crew.  Clearly, the outcome for that venture is not favorable.

 

However, if the landlover entrepreneur were enterprising and convinced 25-yr veteran cruise captain, along with other experienced engineers, hotel and entertainment staff, to join him in his innovative cruise idea, there is a likely chance that it will succeed and a VC firm would want part of that action.

 

No matter how good your business idea is, your leadership team will be the essential chemistry that instills confidence in your financial backers.  Venture capitalists want to know about the core people who are the company.  The right mix of experience, personality, and passion in your team can set your startup apart from the rest.

 

From a venture capitalists’ perspective, what are some important elements that your leadership team should possess?

 

Experience, Experience, Experience!

 

Akin to how important location is to real estate, for a startup company, the most crucial factor is “experience, experience, experience.”  Assemble a leadership team who has proven experience.  Of course, the ideal candidates will have been successful in the same roles in a similar startup company. 

 

However, if you cannot find a candidate with the exact same experience in a startup endeavor, find team members who are experts in their respective fields, such as a CPA for your CFO, an engineer for your chief product technician, and a head marketer with proven success in promotions. 

 

Business Smarts

 

Sometimes smarts and intelligence can be a better substitute than experience.  If you can find members of your leadership team who are creative, smart, and full of ideas that can work for your business, then you further strengthen your endeavor in the eyes of a VC firm.

 

Passion and Drive

 

Venture capital firms like to back startup companies that have people with resolute passion for the endeavor.  Do you believe in your innovative product with all your heart and are able to convince others of its virtues?  Does your CFO love maximizing the internal rate of return and possessing Ghandi-like ethics?  Has your chief software developer been writing computer programs since his old Commodore 64 in junior high?  These are the people you want standing before a VC committee.

 

Resounding Commitment

 

And lastly, is your team committed to your business venture?  Some people, believe it or not, have an alternative motive for joining startups.  It may be just to get out of their current company and career, or simply the chance at more money if your business succeeds. However, the true test of your team is if they are passionate about your entrepreneurial venture and are committed to seeing it through to success.

 

You, as an entrepreneur, have a monumental job of finding and convincing the right people to join you onboard your metaphorical ship before it sets sail.  But if you have chosen carefully and wisely, your potential VC backing may just say “yes.”

 

 

 

 

 

 

 

 

 

Tags: angel investor, angel investors, find capital, Find funding, find venture capital, start up capital, start up funding, vc funding, venture capital, Venture Capitalist

This entry was posted on Tuesday, March 3rd, 2009 at 11:35 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.