How long will your founder team last?

One of the top 3 reasons that startups fail is rooted in team.  

Sole founders find it much harder to scale their companies, and so it is very likely that new people have to join the mix quite quickly.  As they arrive the questions of equity, compensation, decision making, responsibilities and some might say boundaries are all key to the successful human dynamic of that top team.  If the team stutters in its evolution, so does the startup.

For me, in setting up for success from the start there are three key roles to look at beyond the technologist part of the equation.  Ideally there will be founders in each:

1. CEO - the Chief Executive Officer is the primary face of the business, the leader and decision maker.  No matter how flat the organisation of a startup someone has to lead and to be credible in doing so.  Experience counts for a lot here as does strong belief in the journey.
2. Revenue driver - if a startup is going to scale then it needs to find sales.  A strong revenue driver being in place from the beginning is good as it's one of the hardest hires later on.  This person will be closest to customers and bring insights and feedback that will be essential to the roadmap.
3. CFO - Chief Financial Officers are more than interpreters of accounting rules.  They are the people that make the money happen.  With accute sense of timing they enable the money to be there when it's needed and in a fast growth startup this is a skilled job.  Either a part time CFO with oodles of experience in at the start or a co-founder committed in this area is a simple way of ensuring your dreams grow as quick as they might and don't get stopped in their tracks by lack of cash.

In all these roles the big question is experience.  Can first time founders cover all this off or should there be a blend of experience?   In my eyes the decision is firstly about speed -> first time founders are most likely to be slower covering all this ground, and secondly the decision should focus on funding.

If your intent is to raise serious amounts of money, particularly in the USA, then investors will look for these kinds of roles to be covered by experienced people.  

They want to see multiple attempts and some successes in these key areas to give them confidence the team can make a reality out of the potential unfolding.

Will first time founders not be able to raise cash?  Of course not, but the lower the experience and credentials of the team the smaller the pool of investors who will take a gamble.

Will first time founders or sole founders crash and burn within 18 months.  Not always, of course not!  But failure rates are globally around 90% for startups and this team question is a big part of that stat.

There's no single right way of course.  No absolutes in terms of team management and no one way of predicting the future precisely into a paradigm you can begin today.  

At the end of your startup journey, the ultimate arbiter of whether you got it right or wrong is you.  Did you do what you wanted to do, as fast as it could be done, as fast as it needed to be done, with what you had at your disposal to do it?  A great question to ask yourself at the end of each team meeting.

S.