David Barbash on the Key Factors for a Successful Start-Up - Page 2
How important is experienced management to a start-up?
In more than 20 years of practice, I have had the opportunity to work with a number of early stage companies, some of which have had great success, while others, unfortunately, have not been able to successfully take a viable idea and turn it into a sustainable company. As I look back at the successes and failures, one of the overarching differentials is the make-up of the management team. I firmly believe that people invest in people. Therefore, a young company is likely not going to be able to attract investors if its founders are not able to clearly and succinctly demonstrate how they are going to execute their business plan. Beginning with the initial pitch meeting, an investor, whether an angel or a VC, needs to have confidence that the management team has the knowledge, dedication and “business savvy” to grow the company to reach a successful exit, either by means of an IPO or acquisition. Successful entrepreneurs are the ones who, for the most part, couple sound business ideas and concepts with a strong management team.
What are your top tips for start-ups looking to attract investors?
Again, I believe that people invest in people, and, as such, I always advise early stage clients to “look into the mirror” and make sure that they have the right team in place to gain the confidence of potential investors prior to the initial meeting. A professional, well thought out and easy to follow presentation in that initial pitch meeting can oftentimes lead to follow up discussions and possibly an investment down the road. If an entrepreneur does not have the communication skills or experience to make this type of presentation, I often advise them to partner with one or more individuals who have these skills and expertise and who in the past have led successful companies. The most successful entrepreneurs are those who understand their strengths and weaknesses and accept that they may be better positioned to be CIO or CTO rather than CEO of the company. When these people join with partners who complement their skills, they are most likely to the see the dream first sketched out on white board turn into a viable, successful company.