Saturday , 20 October 2018

Why VCs Feels The Urge To Overview More Than One Co- Founder?

Well..!! Who are these venture capitalists ? Ok..!! For the better understanding, one could consider a venture capitalist just like an investor who provides funds to the needy startups or small companies to meet the business requirements. Thereby, they play a promising role in seeding the company or startup to a big level by helping them grow and flourish in the market. Investors have their own protocols and ethics to be followed before jumping into the area of investment. Because they are the ultimate bearer’s of losses as well as gains. This factor makes it mandatory to see and overview at least 2 Co- founders before deciding the area of investment.

The answer to why so a venture capitalist look for at least 2 Co- founders prior investment is because one and more people indicate a good flow of output and ideas.

Imagine, dealing with a single person or single co- founder of the enterprise..!! The work would be very, very hectic because all the pressure right from strategy building, planning, organizing and several other metrics of the business falls in his court.

Whereas, on the other hand, Imagine dealing with two or founders or main persons associated with the business, as a result the work gets shared and more concentration and effort is directed towards the work.

If you were an investor, would you blindly invest in a startup without looking into the background or operation ??? Your answer would be a perfect “NO”. So, in the same way, every venture capitalist look for several components and most importantly the “Skill Set” and the “Composition of Team” be it with some members or the co- founders himself. The necessary skill he browses in the team are good knowledge of the product, design, finance, operation, organizing, sales, marketing etc. Because these qualities help foster the business in good terms.

Why VCs Feels The Urge To Overview More Than One Co- Founder

A founding team or Co- founders indicates the diverse skill set and more scope to drive in good investors into the business. More Co- founders indicates that the entrepreneurs or say Co- founders of the enterprise would be inherited with the following three vital qualities, namely:

  1. A stint of innovation: This is actually a vital trait, as it helps develop a good product embedded with all unique and creative qualities. Because a distinctive product helps capture a good area and position in the market. Thereby having an innovative Co- founder does a great help because they help if solving and perfecting all the challenges quite easily.
  2. Eagled Vision: A sharp vision leads to the path of success. Rallying all the members and the components towards achieving the objective. Building appealing strategies useful to the business help foster growth and success.
  3. Experience: A good experience offers a tailored solution to numerous problems in a good ways. It helps overcome an issue with great ease and in control. Experience teaches the teams the tactics to deal with market and demands effectively.

Therefore, if these essential traits are found in the Co- founders or team then an investor would definitely show interest in investing in the startup. Above all, one should agree the fact that these traits could not be found in a single person or in a single Co- founder. This is why they look into at least two of the Co- founders are taken into account before making investment decisions.

In most of the cases, though more Cofounders are not required, but then sometimes investors feel the necessity to deal with the following stuff in a better way:

  • Extra inflow of skill and knowledge.
  • Easy to divide the work.
  • Good flow of new innovative ideas.
  • Helps solve challenges quite easily.
  • The ups and downs could be triggered down easily.
  • Controlling the company becomes a little easier. Because a solo handling quite hectic.
  • Redundancy, which means one can operate in full swing in the absence of the other.
  • The decision could be made better with mutual discussion and opinions.

Therefore, one can conclude saying that venture capitalists mainly look for the experience and skill set of the Co- founders rather than the numbers. Because their main motive is to ensure that the business is being successfully run by the Co- founders with good competency and potentiality. An entrepreneur who demonstrate’s a good vision and passion towards the business can ripe and pull in better benefits that too from a better investor with all the risk bearing competencies.

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