What was most interesting to notice was how much weight is given to the team, it is more than 1/3 of the consideration. Furthermore, this evaluation extends beyond the basic skills and abilities of the members. Think of a ladder – each rung is important and necessary to climb to the next rung. Evaluation of the team is the bottom rung, and often the sole go-no-go decision point.
Can You and Your Team Execute?
The investors, today, want to see a diversity of perspective and experience, complementary skills, and a history of strong execution. Even better, is if you and your team have a history of successful exit or outcomes in a previous company. The investors will want to know how well you know the industry, how well you have identified the problem, and who on your team is an expert in their area i.e. product engineering, science, clinical. Have you brought together the right subject matter experts?
Next investors look at character – Who are you? Do you possess and demonstrate intellectual honesty? How open-minded are you to hearing feedback? How do you process information and incorporate it into learning and growing? How have you demonstrated grit and resilience throughout your career? Can you find your way out of tough problems with finite resources? What is your reputation/brand in the industry? Your narrative needs to be tight, and honest. If you have had a misstep by making a poor choice, own it, discuss what you learned from it, and how you have integrated this knowledge into your current decisions.
Investors, unlike employers, can and will do a deep dive into your history, often working informal networks of people they know, met, or are introduced to as part of their process of discovery and diligence on you and your team. They simply want to know if you are who you say you are and can do what you say you can do. This is part of the trust-building process.
This important ingredient is more nebulous, hard to control, and centrally critical to initiating, building, and maintaining relationships with your board/investors. You need to have chemistry or a feeling of connection to the people you are backing you with money and other resources. Not only do the investors need to trust you, but they also need to feel some affinity for you and your team. You want to leverage your board and their resources, and having a feeling of camaraderie and connection helps. You, ideally, would like this feeling to be mutual.
One Last Thing
Investors have the advantage, like executive search people, of seeing many companies both succeed and fail. This “cat-bird” seat provides perspective and knowing what a winning team/technology/ and execution looks like and feels like. Adopting their view will only enhance your success – if you want to go fast, go alone if you want to go far, go together.
I hope these insights were helpful to you – and I love to hear your feedback. Feel free to email or call me if I can be of service.