What Investors Look for in a Fundable Startup Team
In the world of startups, you can't throw a Moleskin notebook without hitting someone with a good idea. In a highly competitive market, investors have been increasingly judicious about what, and more importantly, who they invest in.
Top investors are not just looking for the next big idea, but the next innovative team. An idea is inevitably going to transform over time, but the team will (hopefully) stay the same - pursuing the solution to a problem they are obsessed with solving. While ideas are cheap, hard work and collaboration are tough to come by.
The final decision of whether or not to invest in your company may come down to whether investors believe your motley crew of founders and early employees is up for the task. Here are a few of the characteristics that we have seen in teams that easily get funded and go on to build successful companies.
Mutual Respect
A startup is already working against the odds. Having employees or founders working against each other is a sure way to torpedo success. Having a team that listens to each other and takes advice, feedback and criticism to heart helps move a project forward quickly and easily. Gaining consensus on large-scale pivots requires team members to understand and trust each other. This will come naturally when team members have mutual respect, not just for the founders, but for each other.
Diverse Experience
A great founder knows what she doesn't know and hires people smarter than herself to fill the gaps. Having experience in scaling a business requires background in fast-growth business. Having technical experience to build, fix and pivot requires a skilled technologist. Understanding the pace and unique iterative style of a startup requires someone with past successes and failures in the startup world. Before beginning to fundraise, make sure you've built a team that brings their own unique skills. Look for developers who have business experience, look for growth hackers who might have investor relationships. Everyone brings a unique amalgamation of experience. Investors will see that as a huge benefit.
Customer Knowledge
It's inevitable that early startups will make assumptions about what their customers want and will pay for. Having an intimate understanding of your customers and market will give you a huge advantage. You'll waste less time testing ideas and creating products that don't have good market fit. Make smarter informed assumptions and understand how to test those assumptions if you have team members who are a part of the communities that you are building your product to serve, and have the problems your product is hoping to solve.
Adaptability
Every product changes. If you don't take huge pivots early in the startup process like Pinterest or Groupon, you'll definitely have to change as you scale. Having a team that is invested in the problem and solution that your product is trying to fix, rather than the product and features will help them iterate quickly. Adaptability is key to bringing the right product to market.
Compatible Vibe
It goes without saying that teams that like each other, who enjoy being in the same room together for hours at a time are going to make investors more comfortable. Constant tension between team members is bad for a young company. Having a team that feels comfortable opening up about issues, asks for help when they need it and can band together when things get difficult (because they will) shows investors that your company will be more likely to ride out the painfully bumpy road of bringing a startup product to life.