David Weisburd here.
Today, I’m going to tackle one of the most important things you need to know if you want to find the next billion-dollar company: how to find the right founding team to back.
While it may seem relatively straightforward, backing the right team is a very difficult task that continues to evolve alongside the evolution and needs of startup companies themselves.
Rather than tell you what constitutes the “perfect” founding team, I’d like to dig deeper into the actual problem that a startup is attempting to solve and consider the ecosystem in which the startup operates.
It can be argued that some companies, like Uber, which was involved in intense early fighting with the taxi lobby, needed someone like Travis Kalanick, who is the ultimate prototype of a wartime CEO.
Other companies, like Google – which was involved in hyper competitive recruiting wars with other tech companies – needed two nerdy founders (Sergey Brin and Larry Page) in order to create the right work environment and attract the best talent.
Needless to say, one company’s perfect founding team may be completely different from another company’s perfect founding team. That’s why the concept of founder-product fit is so important to understand. Michael Jordan playing baseball is a very different proposition than Michael Jordan playing basketball.
Outside of founder-product fit, the data shows that founding teams with either one (solo) founder or more than four founders have fared more poorly than founding teams with 2-4 founders.
For tech companies, a combination of one (or more) engineering founder and one (or more) salesperson has proven to be the most predictably successful, while an all-MBA (Masters in Business Administration) team without any technical founders has been found to fare very poorly.
All things being equal, startups are the ultimate knowledge workforces. Empirically, founders with Ivy League (or equivalent) degrees have done significantly better than those who didn’t.
This is due to a confluence of factors, including the ability to raise capital, recruit early employees, and the general competitiveness and high bar of entry at these schools.
Aside of any other data at the early stages, being able to find the best founding team to back is the number one leading indicator of a successful angel investor.
Pay careful attention to this question and continue to build your intuition in this area… And it will improve your ability to pick the right companies.
I’ll be back next week with more lessons I learned as a VC. Have a great 4th of July Weekend!
Very best,
David
Today, I’m going to tackle one of the most important things you need to know if you want to find the next billion-dollar company: how to find the right founding team to back.
While it may seem relatively straightforward, backing the right team is a very difficult task that continues to evolve alongside the evolution and needs of startup companies themselves.
Rather than tell you what constitutes the “perfect” founding team, I’d like to dig deeper into the actual problem that a startup is attempting to solve and consider the ecosystem in which the startup operates.
It can be argued that some companies, like Uber, which was involved in intense early fighting with the taxi lobby, needed someone like Travis Kalanick, who is the ultimate prototype of a wartime CEO.
Other companies, like Google – which was involved in hyper competitive recruiting wars with other tech companies – needed two nerdy founders (Sergey Brin and Larry Page) in order to create the right work environment and attract the best talent.
Needless to say, one company’s perfect founding team may be completely different from another company’s perfect founding team. That’s why the concept of founder-product fit is so important to understand. Michael Jordan playing baseball is a very different proposition than Michael Jordan playing basketball.
Outside of founder-product fit, the data shows that founding teams with either one (solo) founder or more than four founders have fared more poorly than founding teams with 2-4 founders.
For tech companies, a combination of one (or more) engineering founder and one (or more) salesperson has proven to be the most predictably successful, while an all-MBA (Masters in Business Administration) team without any technical founders has been found to fare very poorly.
All things being equal, startups are the ultimate knowledge workforces. Empirically, founders with Ivy League (or equivalent) degrees have done significantly better than those who didn’t.
This is due to a confluence of factors, including the ability to raise capital, recruit early employees, and the general competitiveness and high bar of entry at these schools.
Aside of any other data at the early stages, being able to find the best founding team to back is the number one leading indicator of a successful angel investor.
Pay careful attention to this question and continue to build your intuition in this area… And it will improve your ability to pick the right companies.
I’ll be back next week with more lessons I learned as a VC. Have a great 4th of July Weekend!
Very best,
David
Follow @angelsandentrepreneurs
Thank you for sharing all your wisdom. I have been reading all your emails! Welcome to A&E!!! This one is my favorite so far.Makes total and complete sense. Am going to do more due diligence in the future! Keep the articles of wisdom coming.
That’s great information thanks
Great info! Thx a bunch!
Technical Founder is key. Basically, a Tech founder, with a great combination of great coaching in leadership and great lead investors will lead to a “perfect team”