Do I Need a Team To Raise Venture Capital?

Q: How important is having a partner?  As a sole entrepreneur that’s investigating venture capital, is having a partner typically required? What are the justifications to requiring a partner?

If I pursue a venture capital firm without a partner or team, is that a show-stopper?  Can I explain that finding a partner is difficult, or are there no options at all?

A: (Jason).  In my opinion, it is mandatory to have a partner and / or team to raise venture capital.  There are several reasons for this:

1. No single person can do everything.  Everyone needs a partner to balance out his/her actual or perceived weaknesses.  I’ve not met anyone who can do absolutely everything from product vision, executing on a plan, engineering development, marketing, sales, operations, etc.  There are just to many mission-critical tasks in getting a successful company launched.  You will be much happier if you have a partner and / or team to back you up.

2. It’s not a good sign if you can’t get others to get excited about your plan.  It’s hard enough to get venture capitalists to write checks to fund your company, so if you can’t find other team members with the same passion and beliefs as you, this is a warning sign to anyone that might want to fund your company. 

3. If you don’t have a team, what is the venture capitalist investing in?  Just as important as the idea is the team executing it.  In fact, I think most VCs would tell you that they’ve made money on "B" ideas with grade "A" teams but that many an "A" idea was left in the dustbin due to a substandard team. 

The one exception would a repeat entrepreneur.  If the venture fund has had a good experience with an entrepreneur before and believes they can build a solid team post-funding, then he / she has a chance to get funded as a sole entrepreneur.

  • Steve

    Yet: It's a truism that all the best software is written by a single person. It's also a truism that the #1 reason for failure in an early stage startup is conflict between the founders.

    Hmm! How to resolve all these contradictory rules? Perhaps the notion that two founders are required is a sort of cargo cult.

    “It's not a good sign if you can't get others to get excited about your plan” sounds particularly bogus. As an entrepreneur, I can get people plenty excited about my plans. (I call these people “customers”.) That doesn't mean I want them (or need them) to quit their jobs to work on it with me. Because that's really what you're trying to get people to do.

    • David

      If you want to go quickly, go alone. If you want to go far, go together.

  • David

    Right on Jason!

    I have seen far too many people believe that they can do it alone as entrepreneurs and within the corporate environment. They always fail.

    Eventually, entrepreneurs look the wrong way and the market blasts right past them. In the cooperate world, consensus and understanding is the fundamental key needed to brining a solution or idea to market.

    And if I may be so bold there are 2 “truisms” that lead to failure: (in 2 parts – there is a size limit to comments)

    • David

      1. The belief that you can do it alone is the most patently stupid idea in business.

      Those that venture out on their own with the false belief that they don't have to work with others or gain consensus has already failed. Working with others is the by far the most important skill anyone needs for success. Period.

      If you don't have the skill to work with others – Get it. Learn it. Believe it. Live it. It is all about communication.

      The idea that startups fail due to conflict is a fundamentally wrong. Conflict, when used appropriately is the refining power for ideas. Conflict will change a good idea into a great one.

      If you don't know how to manage conflict, Get It. Learn It. Believe it. Live it. It’s still about communication.

      Once co-founders, partners and others vested in an idea or company stop analyzing strategies, ideas and direction it is because they have given up on you, and have stopped communicating, with you. – You have failed, regardless of the stage and size of your venture.

      Don't believe me, then just watch your market share dwindle, product sit on shelves and services go unused. – Your market has given up on you! And it is just the market communicating with you… You can't avoid that it is all about communication.

    • David

      2. The belief that you will lose control by including others is the second most patently stupid idea in business.

      You can't give up something you don't have. And until you are successful you don't have it. And once you are successfully moving in a good direction, you have to maintain that momentum. Or, someone else will see the market opportunity, or come up with a better idea and out market/sell/develop whatever you are doing, soon. Very, very soon.

      Know what your weaknesses are and find others that complement you by having the strength that offset your weaknesses. If you are too small to accept this, you have already failed.

      Nobody, and I mean nobody, gets rich alone. Nobody can do it alone. Nobody can be a success alone. Nobody.

      However — if you are trying to compete with me. By all means continue thinking that way. You won't be a competitor for very long. In fact I have already blasted right past you. And you don't even know it. If I am not a competitor, well then you have a much bigger, meaner and more ruthless competitor to contend with – Time.

      A good team is worth far more than a good idea.

  • tianlun

    Thanks, David
    I learned a lot.

  • NoNameNow

    I do not buy it fully. It depends on each individual's situation. Build all you can and team up when needed. When one stands infront of VC it does not mean that one person is all tha is needed to do that business. If I am the VC I would rather see what that one person has accomplished, can that person do all else that is required (like getting the right set of individuals to make the right team) etc. If teh VC does not see all that no point in asking for funds from that VC as they do not get your idea and potential fully. Team is required not when you can impress the VC.