In your first meeting (and thereafter) a VC will be looking for two key qualities in your management team: competency and compatability.

Your team can demonstrate competency in a few ways. The easiest is to have people on the team who have been successful entrepreneurs. However, you can demonstrate competency without being on your third startup.

The best way to do this is simply by being prepared. Know your industry, know your business model, have a clean presentation, know your barriers, know your competition, use an addressable market (not a market size) and appear comfortable with the information. When a VC sees this they will gain comfort with your team's ability.

Note that being prepared doesn't mean that you need to have every answer. It's OK to not know some details off hand or to not have conducted an obscure analysis before the meeting. While it's no big deal to circle back on some of the questions that a VC has, giving the wrong answer can destroy trust.

Perception can quickly influence reality. Be sure to demonstrate your teams competence by being prepared and being honest.

Comments

[Nate Westheimer]

Hi Mark,

Quick question:

How much of a weighting do you put on an executive's technical knowledge, or lack thereof.

I'm the non-programmer CEO type, and have recently begun teaching myself programming so I can understand better the work of the technical team. I don't intend on spending time contributing to the code, per se, but I have heard from one potential investor that I shouldn't even take the time to learn anything because it will distract me from my real duties: running a business.

Any thoughts here?
Thanks,

Nate Westheimer
CEO / BricaBox.com

[Daniel Kamen]

Hi Mark,
Big fan of your site and have been reading your postings. I just finished creating my business plan and have spent quite some time working on it. I feel I have a good grasp on my industry. My one weakness I believe I might have is that I do not have a team. I do have my mentor, accountant, & attorney, but I do not have partners, web designers, programmers, etc or anyone currently else on board working full-time on my project. How important is this when introducing an idea to VC's or VC groups? Can I just outsource these jobs? Thanks

Best regards,

Daniel Kamen
dkamen@partycheapcrosscountry.com