Your company's management team is important to you.
It's important to potential investors, too. A well-structured management team goes a long way toward giving your investors the confidence they need to fund your company's mission.
But in today's investment climate, a management team that is chocked full of smart and talented people isn't enough to impress investors. What venture capitalists are really looking for are management teams that really function as a team.
What does that mean? Life isn't going to be a bed of roses in your startup. You are going to run into problems and when you do, your investors want to know that your company's management structure will remain intact. So funding a management team that has proven its ability to function as a team is much safer than funding an unproven team of recent Harvard grads.
Venture capitalists value working relationships.
Investors understand the value of working relationships. As business leaders, your investors depend on working relationships to survive. But they also know that disasters happen when functional working relationships fail to develop among team members.
Venture capitalists prefer teams with prior work experience.
The individual business experience of every member of your team is important to investors. But your team's collective working experience is critical. If given a choice, most investors prefer teams who can demonstrate a successful track record – even if it only consists of team members working in the same department or on a project of limited duration.
Venture capitalists look for teams who overcome personality conflicts.
Investors aren't naïve. They know personality conflicts are bound to happen in the highly charged atmosphere of a business startup. But if your management team has already addressed these kinds of conflicts, it's unlikely that personality issues will be capable of causing a major schism in the company.
Venture capitalists crave clear leadership structures.
More often than not, experienced management teams have already sorted out their leadership structures and power struggles. When an experienced team presents their organizational chart to investors, the unspoken reality is that everyone on the management team has comfortably settled into their roles.
Venture capitalists appreciate commitment.
The best management teams demonstrate a high level of commitment to the business and between team members. From an investment standpoint, high commitment translates into greater stability and greater returns.