As founder or CEO of a start-up, the demands placed on you are so broad in scope that you’d literally have to know everything. Which, of course, you can’t. That’s why it’s SO important to build the right team around you.
When failed start-up founders look back, they cite not having had the right team as the 3rd most frequent reason for failure:
- No market need: 42%
- Ran out of cash: 29%
- Not the right team: 23%
- Got outcompeted: 19%
- Pricing issues: 18%
Source: CB Insights
However, building the right team is in itself a complex task. If you have never done it before, how are you supposed to know what to look out for?
One possibility is to team up with a funder who provides not just money, but also their help in getting the right team together.
Listening to a talk by Hong Kong-based venture capital portfolio manager, Estefania Almeida Cordero, I was reminded what an incredible set of opportunities founders can tap into nowadays.
Investors providing more than just money
“We do a personality test with founders, and we show it to them. It helps them understand themselves.”
What venture capital funders want to see in founders today, is “an ability to develop leadership skills. A lot of skills need to be acquired.”
When you try to raise funds for your own venture, never fall for the temptation of accepting money from an investor who brings just that – money.
Estefania, who at the time of her talk worked for Click Ventures but has since moved on to Brinc.io, made it clear how modern venture capitalists help out with more than just money: “We provide mentorship and help people grow.”
As part of that, she helps leaders to ensure that “their vision gets cascaded to all team members so that all are in perfect alignment for continued success.”
Eliminating the biggest risks from your start-up
Falling into the most common traps for start-up failure is easy. Lack of experience, over-enthusiasm, or lack of options due to insufficient funding can quickly kill your fledgling operation, cost you months or years of your work, destroy your dream, and eat up your savings.
If I were able to re-live some of my own experiences of the past two and a half decades of creating and running a variety of different organisations, I’d point towards not having chosen the right investor as one of the key mistakes I committed not just once, but several times.
Investors are always looked at as sources of money. However, founders, CEOs and other key staff need to take care of such a broad set of challenges that it’s virtually impossible to succeed if you haven’t got robust and experienced advice and support on your side.
If you are a first-time founder or leader, do everything in your power to find an investor with a team of professionals who know how to back you up with the necessary skill-sets.
When you try to raise funds for your own venture, never fall for the temptation of accepting money from an investor who brings just that – money. I have worked with incredibly wealthy, seemingly desirable funders… Only to realise later that if there isn’t other back-up and support coming along with the money, the chances of creating lasting, significant value are greatly reduced.
That is, of course, unless you have already gone through enough experiences of your own, to not require such support anymore. There does come a time where you have seen so much that this factor becomes a lot less critical. That’s why founders who are older than 40 have a much higher chance of succeeding than younger founders (here is an article I wrote about this subject based on numbers that came out of the US).
If you are a first-time founder or leader, do everything in your power to find an investor with a team of professionals who know how to back you up with the necessary skill-sets. Admitting to yourself that tapping into such expertise is extremely important isn’t a weakness but a strength. Because, as Estefania pointed out: “No one knows everything.”
As the figures above show, realising this is an important issue and acting on it can easily make the difference between making it or breaking it!
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