By Fernando Berrocal

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A private equity investor–also known as a venture capitalist (VC)–lends money to businesses with strong development potential in exchange for an equity stake.  Angel investors share some qualities with VCs, but are different in that they are wealthy individuals who contribute money to startups (generally in exchange for shares in the business).  Many aspiring startup entrepreneurs invest a lot of time developing the "perfect" business concept to secure solid VC and angel investor startup funding. 

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This process can range from a few days of planning labor to many weeks or even years of hard work in the planning stage of a startup. Small business owners move from the east coast to the west coast and vice-versa, scheduling meetings with various business prospects and modifying their primary startup concept. However, the unpleasant truth is that less than 1% of American businesses have gotten funding from venture capitalists and angel investors, according to recent research from the Harvard Business Review.

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Given the intense competition that exists nowadays, it would make sense for you to devote even more time to refining your main startup idea on the surface. However, the truth is that most VCs don't give your business proposal much consideration in the end. Instead, your management team is much more likely to get the main attention of startup investors–including VCs and angel investors. In the following paragraphs, we will go over why VCs and angel investors prioritize teamwork over the concept of investing in a startup; and how you can take advantage of it.

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Without Execution, Even Outstanding Ideas Are Worthless

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There's a high possibility that an investor will be more interested in learning more about you and your team than they will be in learning about your overall startup idea. Even the best business idea won't succeed if it isn't carried out properly by an outstanding startup team. On the other hand, a capable management team can make even a lousy business idea flourish if they are committed to seeing it through. A VC or angel investor wants to know that you are a strong and flexible business leader who can execute in any scenario.

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The startup is likely to fail if you are the type of person who gives up when things start to become difficult. And, in that case, business investors would lose everything they have invested in a startup. Many VCs and angel investors will consider your track record of tenacity and grit rather than getting fixated on your overall idea.  To them, this ultimately avoids what seems like an investment risk.

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Team Members Need to be Motivated

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Investors will evaluate your management team's advantages and disadvantages by evaluating them. They'll also guarantee that everyone on your team has complementary skill sets that will improve the startup. such as technical and financial talents. This will eventually enable them to picture the group succeeding in fully realizing the final concept. VCs are interested in startup teams (whether it be in an office, or remotely) that have a variety of skills that can contribute to the overall success of the endeavor. The talent of individuals working on the business idea, whatever it may be, is more important than just the idea itself.

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Each member of your initial team should also have a specific business role. People on your team should be aware of their main roles, and the value they provide to the startup team as a whole. Members of the team should also be enthusiastic about what they do–and willing to put in a lot of effort to make the startup successful.  Your objective as a founder is to create a productive team that functions well as a business unit. Investors are more likely to be impressed when you select individuals with a) a commitment to shared success, and b) a balanced assortment of skill sets that range from very technical to soft business skills.

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Opinions Change, but an Adaptable Team Can Change Course

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VCs and angel investors prefer to focus on teams rather than on general ideas.  This can largely be attributed to the fact that strong teams tend to “pivot” better than dysfunctional ones.  When everything depends on an idea–and the idea turns out not to be such a wonderful move–there may be significant losses. Instead, when teams are committed to succeeding (even if the idea changes), investing in a competent team ends up resulting in greater future benefits. There are several contemporary examples of successful pivots; a well-known example is the social media platform Twitter.  Initially, the business was known as Odeo and concentrated mainly on podcasts. Nevertheless, Odeo understood that Apple´s iTunes would sooner than later surpass them. To focus on microblogging, Odeo changed its name to Twitter and became a major player in social media.

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Groupon, PayPal, and Pinterest are a few other well-known examples of present-day business pivots in the present day. If they hadn't changed course after their first ideas didn't work out, we might have never heard of these important web business players.  As a startup entrepreneur, you may similarly be in a pivot scenario someday.  The key is simple: assemble a passionate, dedicated, and flexible team made up of intelligent individuals.  With this foundation laid, you will be more likely to identify issues with your original idea, and pivot in time.  Remember: before they get too worried about your business ideas, VCs search for possibilities in teams. Consider your team first if you want a greater chance of getting funding for your concept.

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