What do investors look for in funding a team?
Friday, November 16, 2012/
What sort of teams do investors look to back?
Do you have to make sure every base (tech, marketing, operations etc) is covered by someone who is experienced if you’re to get funding?
Investors look to back quality teams – but what is a quality team?
We look for teams with a good mix of a technology and business – having these two skillsets is a huge asset in a technology start-up. It’s more risky to go with a pure technology team, or a pure business team; a balance between the two helps set a strong foundation.
We tend to have a preference for teams of two founders. This isn’t a strict rule, as companies come in different shapes and sizes, but not only will two founders often fill the aforementioned business and technology roles, but two founders can provide moral support to each other during the tough times.
The partnership should be strong, well balanced, work well together, and share common goals for their company.
We are always pleased to see successful past entrepreneurs come to us with their new ventures, and it should be noted we don’t discount failed entrepreneurs.
A failed entrepreneur is familiar with the process of working on a start-up, knows what to expect, and can draw upon their past experiences.
Every base does not need to be covered. As an institutional investor, Starfish spends a fair amount of time helping new investee companies with their needs assessment and then filling the identified gaps.
For example, we make sure the finance team is reporting to best practice, and applies for applicable R&D grants. The same goes for sales and marketing – our team spends time looking at the sales pipe, and provides input and guidance on go to market plans.
We try to fill missing skillsets with training or mentoring and often use our network of contacts to assist the company with prospective candidates for roles.
We consider each and every deal on its own merits, so this shouldn’t be considered a template, more guidance. The key is the mix of technology and business upon which to build the company.