The team is the driving force behind any company and it is true especially in startups, which are expected to grow faster than regular businesses.
The success of a startup is heavily dependent on the team. The people are the ones bringing the initial idea to life. Having the right people on board is important to get things going in the right direction.
If a company has the right product and a good market fit, you need to see if the people are the right ones to execute on capturing it. A team of experts, people who excel in their areas, is needed, in order to turn an idea into a profitable and successful company.
Why is the team so important?
In the early stages, a startup only has an idea and maybe also a business plan, but no proof of concept, which makes it riskier to invest in. It is the team behind it, who will make things happen at that stage particularly, and the survival of a startup depends largely on their actions.
For a startup to thrive, the team needs thorough knowledge about their industry, their product, the market, business operations, marketing etc.
Clearly, this requires some highly-skilled people.
Running a business is most likely not a smooth journey all of the time. There will be setbacks but one thing that will be certain in those times — the team. Great teams can deal with these situations and are quick to adapt. This is crucial to keep the business running through the rough times and help the startup achieve its goals.
What makes the team special?
Almost all startups have a team, but what makes the team special? Not all teams are able to drive the company to success and deal with setbacks. Bad teams might even doom a startup.
Therefore, it is wise to assess the team’s abilities before investing in one. Why is this particular team unique and able to execute the startup’s business plan? What is their domain expertise that gives them an advantage?
A great team is not just about having intelligent people on board, but people, who complement each other. A symbiosis between team members is a desirable characteristic to look out for.
How to know, if the people running the startup are the right ones? Start by looking at the founders’ and key team members’ background stories.
- What is their previous experience?
- What are they specialised in?
- What is their education?
- Have they ever run a startup before and if so, how did it work out?
- Does their personality compliment the other team members?
For example, someone who has had a specific role in a corporate environment for 10 years, might have a hard time running a startup, where multitasking is common and dealing with different tasks is a part of the daily life.
An important quality among the team members is passion. Does the team themselves believe in what they are doing? Passion is something that helps the team through tougher times and drives them towards success. But be aware of overly-ambitious entrepreneurs, who can sometimes be reluctant to adapt to changes that have to be made to survive but which might ruin their ambitious plans.
The Team Checklist
Don’t forget to research the team before you invest into a startup. A team can make or break the company, so it’s important to invest in the right people. Once you have gathered all the information, ask yourself, are they the right people to bring the idea to life and capture the market?
We have prepared a small checklist you can use as a guide to understanding the team of the startup in focus.
The Funderbeam Guide for New Investors
In case you missed the previous chapters in our series and want to know more, check them out here:
- Investing in Startups: 10 Checks Before Your First Deal
- 1) The Problem — Analysing Your First Investment
- 2) The Solution — Does It Solve The Problem And Can We Make Money Doing So?
- 3) The Market — Who Is Going to Buy The Solution?
- 4) The Competition — How Does the Startup Stand Out from the Crowd?
- More coming soon!
Funderbeam consists of three parts:
- Free data intelligence on investors and startups
- Tools for startups to raise funds and for investors to co-invest
- A marketplace for investors to buy and sell their investments
Our vision is to provide everyone in the world with equal opportunities, whether you are building a company, or looking to fund the next big thing. What if the next Silicon Valley is not a place, but a platform?
LEARN MORE ON FUNDERBEAM.COM, OR WATCH THE VIDEO BELOW: