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What Investors Look for Beyond Financials: Startup Management Team

As an entrepreneur, you’vstartup management teame worked hard to support your idea. You’ve created a memorable pitch, you’ve identified your potential market size, and you’ve maybe even achieved some customer interest or product sales. However, when it comes time to present your company to investors, the question still stands: What do investors look for when evaluating startups?

While every investor or VC firm is different, startup founders know most will want to review financial information like revenue, sales numbers, number of signups, future goals, and projections. But beyond financials, you may be unsure of what to highlight. In this four-part series, we’ll be sharing our tips on what to include in your startup pitch. Today, it begins with your startup’s management team.

In an investor’s eyes, your management team is key. Company leadership can make or break your chance of building and executing a business plan, so your team should have complementary skills within marketing, product development, and operations. Where one team member may have years of experience as Sr. Vice President of Sales, another can bring a background in operations management to the team to ensure well-rounded leadership. With many moving pieces, your team should be able to collaborate and understand where each individual’s skills are best used. Your team should be passionate about the product and industry but also be able to check egos at the door for the best of the business.

Investors also often look for management with ties to the industry. With deep, relevant experience, your team can understand how the industry works and can more clearly see potential areas for disruption and expansion opportunities. That experience often gives company leadership unique relationships, enabling them to connect or partner with industry leaders no other startup can access. Plus, showcasing the well-known and accomplished members of the industry within your team provides social proof of support for your startup.

Without the right management team, it may be difficult for the startup to scale when the time comes. While some investors may want to sit on the board or be tapped for advice, most do not think of themselves as management consultants – especially if they’re seasoned investors and are working with a number of startups at the same time. Whereas company restructuring is possible, it’s far more likely to gain investors’ interest with a strong management team in place beginning day one.

Stay tuned for our next installment of what investors look for beyond financials. In the meantime, are you a MicroVentures investor? If not, sign up today.