Angel investing can be a thrilling yet challenging endeavour. One of the most critical decisions an investor must make is assessing the founding team of a startup. It’s often said that investors invest in people, not just ideas, and there’s a good reason for this.
The right team can take a mediocre idea and turn it into a successful business, while a subpar team can take a brilliant idea and run it into the ground.
Here are some qualities to look for when assessing startup founders.
1. Domain Expertise:
A founding team should have a deep understanding of the industry they’re operating in. This includes knowledge of the market dynamics, customer needs, and competitive landscape. They should also have relevant skills and experience that make them well-equipped to solve their identified problems.
2. Adaptability:
Startups often face unforeseen challenges and changes in the market. A good founding team should be adaptable and able to pivot their strategy if needed. They should demonstrate a willingness to listen, learn, and adjust their approach based on new information and feedback.
3. Vision and Passion:
Successful founders are driven by a clear vision and a passion for what they’re building. This drive is often what keeps them going through the ups and downs of startup life. As an investor, you want to back founders committed to their vision and determined to see it through.
4. Problem-Solving Skills:
Startups are all about solving problems and creating value. A founding team should have strong problem-solving skills and a creative approach to tackling challenges. They should be able to identify potential roadblocks and come up with solutions to overcome them.
5. Complementary Skillsets:
A well-balanced founding team should have complementary skillsets that cover the critical areas of the business, such as product development, sales, marketing, and finance. This helps ensure that the team has the capabilities needed to execute their business plan effectively.
6. Coachability:
While founders need to have confidence in their vision, they should also be open to feedback and guidance. As an investor, you bring valuable experience and insights to the table, and you want to work with founders who are receptive to your input.
In conclusion, assessing the founding team is a crucial step in the investment process. By looking for these qualities, you can increase your chances of backing startups that have the potential to thrive and deliver a return on your investment.
