At some point in every startup, a management team has to be put together. Often this needs to be done to build out an early stage management team before private equity investors and venture capitalists are willing to invest. Sometimes venture capital groups will assist in this effort. As you assemble a management team, it is useful to consider how investors will evaluate the group. And it is important to consider that while this is how outside investors will evaluate the team, this is how founders should evaluate their management team as well. After all the founders are the biggest investors in the startup as they have dedicated their lives to the venture. Not just their money. It is also extremely important not to make mistakes in putting together a management team. A poorly constructed team can reduce the chances of venture capital investment and can hurt the chances of success of the startup. In my experience, here are the 8 most important points that should be considered.
Is the team complete across all functional areas needed? Are the appropriate functional disciplines covered for the opportunity to succeed?
Are there a sufficiently diverse set of skills within the team? The skills needed will depend on the nature of the startup to be built.
3. Complementary Skills
Are the people complementary? Is there too much concentration in one area? Often there will be an over concentration of technical or business oriented people. Balance is important.
4. Past success
What is the past success of the team? Have they worked together before? This is an important item for venture capital investors. They are very fond of intact management teams that have worked together in the past.
What is the commitment level of the team? Are they all in or just dabbling? Is this a part time activity. Did they “Burn the Boats”?
6. Energy Level
What is their energy level, drive and enthusiasm? Does the team have the desire to overcome all obstacles
Is there evidence of sound business judgment in decision making?
8. View of Investors
Does the management team see the investors as partners in the startup? Or just money.
Other Viewpoints on Building Startup Teams
For some additional information and thoughts on the startup management team see below.
AlltopStartups also has some good posts on the topic. 11 Reasons Why Your Founding Team Is Important To Investors is a good place to start.