- Why diversity matters?
- Do you have the drive to change the world?
- How many founders should be in a startup team?
“You can have the world’s best product, but if you don’t have the best team, you will never succeed”, says Patrick Sandahl, partner in Cidron Ventures.
Sandahl has broad experience as investor. He has sold several companies, merged listed businesses and done public to private transactions and one IPO. Before he invests in any technology company, he evaluates teams and their members based on several criteria. Diversity is one of the first things he looks for in the founding team.
“I would never invest in a company where there is absolutely no diversity. It can be diversity in gender, different cultures and regions, or diversity in opinions – and especially in experience and personality. For example, sometimes in a team you have one strong leader and many followers. What you end up is people who either fear you or can’t challenge you.”
When it comes to experience, he thinks that balance and a broad range of skills are important.
“Do you have different type of talents with unique skillsets so that you can build a diverse team? Do founders have the ability to attract diverse top talent?”
Do you have the drive to change the world?
Sandahl has previously been partner at venture capital fund Telenor Venture, CEO of Dyvi and Director at Nordea Investment Banking. These days he is considering starting a new venture fund that will invest in capital efficient, B2B software propositions in areas such as digital security, financial or educational technology, and digital health. He is on the lookout for game-changing ideas as well as passionate and ambitious teams.
“Do founders have the drive to change the world? Do they want to scale aggressively, not just when it comes to the revenue, but also their choice of technologies, product and platform? Also do they have the persistence, an ability and willingness to grind out and sustain through the hard times that the entrepreneurs will necessarily face?”
What will you do in the future?
He looks at the teams’ past performance, either academic or professional achievements.
“It helps to paint a picture of past performance, but I am more interested in what they are going to do in the future. I think generally in work life we tend to focus too much on what the CV says, instead of conducting longer interviews and involving HR-experts who can help to find the right candidate.”
Do we click?
Finally, he looks at founders’ personal skills like integrity and chemistry.
“As investors, we evaluate the team and see if there is strong chemistry between members of the team. What we often forget is also to evaluate the team and us, investors, together. It is tough to build a company, and there will be rough times, so it is essential that there is good chemistry with the investors as well.”
How many founders are ok?
Sean Percival is an American investor and entrepreneur from California. He was partner at 500 Startups, a venture fund and global accelerator program.
Percival says that there are different opinions on whether the best startup team consists of one or several founders. More often than not, investors are sceptical to invest in single founders.
“Doing a startup is incredibly hard and very often investors in Silicon Valley turn down single founders. It is a negative signal for them. That you are struggling to recruit people to build the company with you.”
From his point of view a great founding team consists often of just two or three people with different background and diverse skills.
“It is the technical person who is making the product and a person who can be responsible for keeping the business alive. Then you need marketing talent. It can be either someone in the team, or one of the founders should work with marketing.”
“For example, you have two founders, a man and a woman. The woman does all the coding, and doesn’t know anything about for example fundraising. The man is the sales guy and wants to meet with VCs and pitch their company. Together they are complete, like yin and yang.”
“I worry when I see a startup with 4-5 founders, but none of them have any distinct skill. They do everything, and they are not really good at anything. There will be disagreements and a lot of stepping on toes.”
In addition to that, he looks for the team’s confidence and tenacity.
“Last time I was an entrepreneur myself, we were fundraising and did really well. However, I still got 50 no’s before I got the yes I needed. It’s hard to get no over and over again. That’s why when I invest in teams, I see if they will keep going despite of all the no`s they will get.”
These days Percival is based in Oslo and contributes to the Norwegian startup scene.