I recently had dinner with my favorite serial entrepreneur and uncle (hi Mike!) who offered me an observation about building startups. “Kelly” he explained, “It’s so rare to have such strong chemistry with a team of founders. I’ve seen it happen only once or twice or in my lifetime and it’s like magic. That’s what you have at Nicholas Brinley Capital.” I sipped my red wine and thought long and hard about that. I’ve worked alongside my founding team for the better part of three years and I can honestly say we’ve put our blood, sweat and tears into our business. It’s been late nights (turned early mornings), arguments that would make the boldest blush, belly laughs so hard I’ve cried and – most importantly – a friendship with two people I can honestly say will be a part of my life forever.
Ok, ok, enough of the sappy sh*t.
What I’m saying is the dynamic between a founding team is mission critical especially when it comes to raising capital. In fact, when we introduce companies to our network of 75+ investors one of the first questions they have is what the founding team is like and where their background lies. Trust me when I say you will experience your highest highs and lowest lows alongside your co-founders and infusing your business with capital only magnifies those extremes. It’s important to get it right.
I’m often asked when I meet early-stage entrepreneurs what the ‘optimal’ number of founders is. My answer is 2-3. Why? Having just one founder makes you a lone wolf. Building a tech startup is hard work and there will inevitably be a point where you want to give up (I’ve nearly quit 7 different times this week!). An investor wants to know you have the ‘Bonnie to your Clyde’ to keep you motivated when times get tough. Conversely, when you start having 4+ founders the decision making process gets tricky – too many cooks in the kitchen as they say.
As you reflect on your own ‘amigos’, consider these four things investors look for in founding teams.
#1 Previous Success
I’m not talking about a billion dollar exit in your last startup or a degree from Harvard. I’m talking about the babysitting business in high school that paid for summer camp or the nonprofit you worked for overseas after college. Demonstrating you’ve been successful *at anything* in your former life helps check the ‘fundability box’ for an investor.
#2 Complimentary Skills & Chemistry
My favorite set of co-founders are the ones that have both a CEO (think charismatic visionary who can sell) and a CTO (someone who probably took apart computers in high school and can keep the CEO’s feet on the ground). Saar Gur, partner at CRV says he looks for co-founders that understand, “how they can work together to execute well and have a concrete vision for who they need to hire and when they need to hire them”. I chose to go into business with a crazy Welsh guy that can sell a cage to a lion and a Woman from Ohio who can manage any project you hand her (with multiple color coded, contingency plans) – opposites most definitely attract. 🙂
#3 Domain Knowledge
If you’ve ever sat in a zoom call with Marc, Janine or I you know we don’t shut up about founder-market-fit. We actually light up when we meet a founder who understands their industry intimately because we know it’s the foundation of high-growth teams. Parul Singh, Principal at Founder Collective says it best: “It takes that personal and emotional connection to a problem to get a founder through the tough times.”
#4 Confidence & Conviction
As a twenty-something year old who spends all day telling people twice her age how to raise millions of dollars – this one hits home for me. I believe confidence is my greatest strength and that holds true for all founders paving their way in their respective industries. Scott Kupor author of Secrets of Sandhill Road calls it being ‘egomaniacal’ – a trait he actually seeks out in founders. You have to believe in yourself and your idea to the point of being border-line crazy even when no one else does!
My team and I are reaching an exciting inflection point where we are getting ready to scale. Soon, we will have a couple of new hires (say a prayer for them!) working alongside us to help support more superstar Founders. You’ll soon find yourself in the same position, but on steroids. Someone’s guest bedroom will turn into a 3,000sq ft. office, your headcount will grow from 3 to 50 and your sanity will be seriously challenged. 🙂 One thing will remain however – the bond you share with your own amigos and your commitment to them.