In a previous post, I discussed the issue of betting on the idea or the team. Although research suggested that the idea was more important, especially in early-stage when so many things are yet to be defined (even the idea), the team is absolutely critical and often the most important aspect for the VC. But how can entrepreneurs convince a VC about the strengths of the team?

When I am evaluating teams I tend to look at:

Managerial and organizational skills

A team means more than one person. At Creandum we don’t invest in single individuals and we prefer teams of more than two people.

Building a great business has a lot to do with being able to scale the organization. This means recruiting great people as well as creating frameworks for people to perform. The more complete the team is in terms of complementing talents and experiences, the better it is and previous experiences of building organizations are clearly beneficial.

Vision vs execution

Great teams manage to be both executive and visionary. To have a sense of where you are going is important but making sure things happen is even more important. Previous achievements that show executive skills are important and could range from previous ventures to extra-curriculum activities.

Entrepreneurial mindset

Things that I look for include drive, ambition, seeing and seizing opportunities, and being able to create things with limited resources. 

Sales skills

In a startup, almost everyone will or should be involved in sales in one form or another. The sooner a company realizes that products do not sell themselves the better. But you’re not only selling to customers but also to suppliers, investors, banks, and future employees, advisors & board members. The best way to show good sales skills is to have paying customers but how you handle the VC-relation could also be a good indicator (e.g. preparation, presentation, issuing good news at the right time, professional and timely deliverables, over-delivering etc).

The spike

The spike is an area where the team is especially strong. It could for example be technology or specific industry experience/insight. Understanding the industry dynamics and what it takes to be successful is often critical to evaluate market opportunities as well as how to beat the competition. In some cases, patents and IP-rights are valuable but more often it is all about making sure you are better than everyone else at delivering value to your customers.

Integrity and trustworthiness

I want to invest in people that I can trust. Who are not afraid of breaking bad news and who are genuinely interested in building a great business. This is perhaps the toughest part to prove but getting a recommendation by a trusted person is usually helpful. Also, make sure to not overpromise and under-deliver e.g. in terms of falsification of numbers, contacts and relationships, and previous achievements.