04 Oct Why You?
If you ask most early-stage VCs their number one criteria for investing in a startup, the answer you will get is “team.” Even market first investors, like us, want to know why the team is best suited to tackle the problem.
In a fundraising environment that is becoming more crowded, differentiation is incredibly difficult and the question I’m often left asking after reviewing a deck is “why you?” As in why are you the best person to solve this problem?
Yet, for some reason, most of the decks that come across my desk leave the team slide either somewhere in the middle or near the end instead of answering that question early and with clarity.
Team, team, team, market, team. — Mark Suster, General Partner at Upfront Ventures
The one thing that always stands out the most in an early stage startup is the team. We invest quite early in a company’s life; it will usually take 6–10 years for the company to reach giant success. Given that, many things will go wrong and the one mitigating factor for setbacks is a great team. We spend the most amount of time thinking about the founders and the early team before investing. — David Pakman, Partner at Venrock
The answer can be as simple as the invention serves the need of the inventor. Our first portfolio company all suffered from the disease they were working to monitor and as a result understood the daily life of their customer. This has been a guiding force in their product design and cost.
Perhaps you have extensive work experience in the industry and have seen the problems from the inside. This is especially important in industries that require the careful navigation of regulation, long sales cycles, entrenched incumbents, and/or bureaucracy.
While the best stories in Silicon Valley lore often involve a founder rescuing an industry with innovation from a fresh perspective, the truth is founder-market fit matters and in most cases is a strong advantage.
Be brutally honest with yourself, are you uniquely qualified to execute on your business? If so, trying leading with the team first – the risk is low and the rewards could be worth it.