Ask YC: What are VCs looking for in a "team"?
6 comments
Depends on the VCs. The better ones are looking for tech whizzes. The ones lower down may still be looking for MBAs. What all want is some sign that you're a very effective person. They look at a combination of resume, recommendations, and their own impressions to decide that.
If you're working in a niche field, VCs may also care whether you have experience in it. But this doesn't matter as much as being smart and effective. If Blake Ross wanted to start a healthcare startup, VCs would fund it.
If you're working in a niche field, VCs may also care whether you have experience in it. But this doesn't matter as much as being smart and effective. If Blake Ross wanted to start a healthcare startup, VCs would fund it.
What they want, ideally, is someone who was successful in your space. Second place goes to someone who failed in your space (and in about your size-range). That's why YC is so special--pg & co are willing to give folks a shot that nobody else will.
Having said that, if you are going for the "real thing" VC with $5-10M first-round financing, get someone who's done it on your team. It pays off manifold ways.
Smart VC know that your business is going to change. Significantly. Knowing how to do this comes with experience, inside business experience, that is hard to get except by doing it. An experienced CEO knows how to manage the changes, keep the investors off the backs of the workers when things get rough. And they will get rough.
From a pragmatic perspective, someone with experience already has the VC contacts to call, and knows how to tailor the pitches to each. This is a huge plus when getting started.
Having said that, if you are going for the "real thing" VC with $5-10M first-round financing, get someone who's done it on your team. It pays off manifold ways.
Smart VC know that your business is going to change. Significantly. Knowing how to do this comes with experience, inside business experience, that is hard to get except by doing it. An experienced CEO knows how to manage the changes, keep the investors off the backs of the workers when things get rough. And they will get rough.
From a pragmatic perspective, someone with experience already has the VC contacts to call, and knows how to tailor the pitches to each. This is a huge plus when getting started.
Being able to execute means not chasing after shiny objects and being able to say "No". A favorite quote from Steve Jobs (on innovating):
[I]t comes from saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much. We’re always thinking about new markets we could enter, but it’s only by saying no that you can concentrate on the things that are really important.
[I]t comes from saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much. We’re always thinking about new markets we could enter, but it’s only by saying no that you can concentrate on the things that are really important.
What part of "execute" don't you get? Hehe, that's exactly what it means: Get it done. On time. With quality.
It's deceptively simple. Can your team (no quotes) do it, and do it well?
Who cares if you are a brilliant programmer... Can you deliver what is required, or are you going to build a gold-plated, incomplete product? That's what execute means, and it's really freekin hard to get that into people's minds: Get it done, do it good enough, don't do it perfect. Perfect ain't for startups, it's for time-wasting hobbyists.
As for the MBA or whatever big university name or title or whatever: It doesn't matter squat. "Harvard" on your resume might get people's attention, but ultimately what matters is "can this person execute?" I have seen some brilliant people without an education do extremely well... And I have seen collossal failures out of people that look like the top 0.1% on paper.
It all boils down to execution: Getting it done. Can this guy prioritize correctly? Does this person know what's important for launch?
It's deceptively simple. Can your team (no quotes) do it, and do it well?
Who cares if you are a brilliant programmer... Can you deliver what is required, or are you going to build a gold-plated, incomplete product? That's what execute means, and it's really freekin hard to get that into people's minds: Get it done, do it good enough, don't do it perfect. Perfect ain't for startups, it's for time-wasting hobbyists.
As for the MBA or whatever big university name or title or whatever: It doesn't matter squat. "Harvard" on your resume might get people's attention, but ultimately what matters is "can this person execute?" I have seen some brilliant people without an education do extremely well... And I have seen collossal failures out of people that look like the top 0.1% on paper.
It all boils down to execution: Getting it done. Can this guy prioritize correctly? Does this person know what's important for launch?
I've thought a lot about this as well. From the outside looking in, it feels like investors would much rather fund entrepreneurs with previous successes or an existing hot product. I can't really blame them, but it makes the job of the first-time entrepreneur that much more difficult in getting off the ground. Which makes startup programs like YC all the more important.
we've seen that investors also care about your passion/interest in the problem and the genesis of the problem (are you solving it for yourself or just chasing dollars?).
I would't get too excited about your consulting experience (unless you're building software for consultancies). Being a consultant and shipping software products are pretty different. One of my cofounders and I both built pretty sizable consulting companies over 5 or 6 years. So far every investor has utterly ignored that and was way more interested in the startup we previously built and sold in 6 months. One actually expressed suspicion of founders with consulting backgrounds.
I would't get too excited about your consulting experience (unless you're building software for consultancies). Being a consultant and shipping software products are pretty different. One of my cofounders and I both built pretty sizable consulting companies over 5 or 6 years. So far every investor has utterly ignored that and was way more interested in the startup we previously built and sold in 6 months. One actually expressed suspicion of founders with consulting backgrounds.
Thanks for your response! So working at a consulting company implementing web-based applications doesn't count? I totally agree that it is not like shipping software products, but our startup is building a web-based service. Previous experience with a startup is something neither one of us have, is this going to be a huge factor?
Could you elaborate on "suspicion of founders with consulting background"? When I say consulting I don't mean management consulting, I'm referring to system integration firms such as Accenture, BAH, IBM, etc.
Is there anything one can do to offset the lack of startup experience?
Could you elaborate on "suspicion of founders with consulting background"? When I say consulting I don't mean management consulting, I'm referring to system integration firms such as Accenture, BAH, IBM, etc.
Is there anything one can do to offset the lack of startup experience?
Re: Is there anything one can do to offset the lack of startup experience?
Contribute to an open source project.
Contribute to an open source project.
I know VCs are looking for a good team because that's what they are investing in. But does this mean having MBA guys with management experience, or technical guys with CS degrees from top colleges? We are two CS majors from Univ. of MD and Duke University, with about 15 years of combined experience at major consulting firms designing/implementing technical projects. How should we be looking to grow the team to meet VC criteria?
Thanks in advance for the advice!