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| It's All in the Players |
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There's more to hatching a successful business than the right atmosphere. What does a venture capitalist or potential investor look for when seeking new business opportunities? What distinguishes one aspiring company from another? Was the budding Mirabilis from the start-up doomed to failure?
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"Lots of folks confuse bad management with destiny." –Kim Hubbard
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One venture capitalist summed up his main criterion in one word: people. Beyond products, beyond burgeoning market sectors, it all revolves around people — people with the necessary skills and background to take a bright idea from concept to market.
The management team presented in your business plan must inspire confidence in prospective investors. Does your team have a proven track record in running a successful company? A good understanding of the market in which you are operating? The necessary expertise to successfully implement the marketing strategy? Are you realistic in your expectations: can you see the pitfalls as well as the potential?
It's all about skills and on-the-job experience. Putting the right people in place to do the job well, and being able to survive the "slings and arrows" of a changing global marketplace. Depending on the market sector, the type of people you need on your team will vary. However, all businesses need a CEO, Chief Financial Officer and Marketing and Sales Director.
In addition to the management team, you can strongly increase your position if you have good industry contacts, a strong board of directors, and when appropriate, a technical advisory board.
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| "Without a strong management team in place to implement that business plan, just try getting more than a big laugh out of a venture capitalist."
–Fortune and Your Company
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It's not only venture capitalists who are cagey about investing in young, untested companies. Executive director of the BIRD Foundation (U.S./Israel Binational Industrial Research & Development Foundation), Dov Hershberg, announced recently that the main criterion for allocating money to companies will be the quality of their management. Quoted in the Israeli newspaper Ha'aretz, Hershberg defined better management as having a vision and strategy that looks beyond wanting to be bought by a foreign company as soon as possible, for the highest price. According to Hershberg, "the overwhelming majority of Israeli high-tech start-ups aim too low, are sold too soon, and for less than they should be."
At any point during development, it's the decision makers who have the power to make — or break — a new product or technology. And more and more venture capitalists are recognizing that fact.
The message is clear: having new, exciting technology is not enough. It's your people that will make the difference.
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| The Trendletter team welcomes your comments. |
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