Most investors will agree that the quality of the management team is the best predictor of a startup’s success. Do not compromise when it comes to the team. Determine what roles you need to fill and find a strong player for each role.
Get advice and input when looking for key management team members. If you’re hiring a CEO or any CXX position or any VP position, you should get your advisory board and/or board of directors involved in the vetting process. These choices are critical. Get help!
The more complete your team is, the more likely it is that you’ll get funded (and a more complete, solid team will get a better valuation.) Likely roles for an early stage startup could include:
- CEO (Chief Executive Officer)
- CTO (Chief Technology Officer)
- VP of Marketing and/or VP of Business Development
- VP of Engineering
- Controller or Office Manager
- VP of Sales
- VP of Sales is often a later addition. Early on, the CEO is the head sales person
- The list doesn’t include a CFO. Early on, may or may not be an expense you have to take on. But a Controller or Office Manager who also takes care of the Human Resources function probably is a good idea.
- Having a team with knowledge of and experience in the market you are addressing is important (and is something VCs will want to see) because it means your team understands a lot about how business is conducted in this market, and probably has relationships with some prospective customers
- Experience having done venture funding before is also very helpful (and something VCs will want to see). If you, as CEO, don’t have that experience, hire someone who does. (That could be a rationale for hiring a CFO earlier than you normally would.)
Evolving The Team
Founders need to be ready to replace themselves. The team that starts a company might not be (probably is not) the team to manage it through multiple stages of growth. Moving out the old management team is a tough thing to do, but can be the right thing for the company.