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VCs pass on investment opportunities for a whole host of reasons having to do with the business, personal experiences or the makeup of the existing portfolio. The reason that VCs are least likely to cite, however, is likely to be one of the most common reasons for deciding not to invest: entrepreneur competency.

It’s important for entrepreneurs to consistently try to demonstrate competency throughout the fundraising process. This is critical because the team is a key part of the investment decision; VCs are investing in more than an idea, they are investing in the individuals that are going to run the startup.

VCs, however, have a tough time telling entrepreneurs that team is the reason that they are not going to invest. I think this is pretty understandable - telling a founder that you like the idea but won’t invest in them is usually taken as an offensive statement. Furthermore, in an environment where an investor’s reputation is a critical driver of their success, offending entrepreneurs can be a career hindering move that VCs would prefer to avoid.

This begs that question: if VCs often decide not to invest in a company because of the team, but won’t tell the entrepreneurs, how can entrepreneurs figure out that they’re scaring away the VCs? There are a couple of ways.

First, if you find that your team has great success in obtaining lots of meetings with investors based upon the merit of the idea but find that investors quickly pass after meeting you and your partners, the team may be the problem.

Second, if investors seem to spend a decent bit of time delicately probing about the team, asking questions like “what gaps exist in your team as it stands today?” or “what are your current roles, and how do you see those evolving over time?”, investors may have concerns about your company’s leadership.

Ultimately, sniffing out this issue is a difficult one, as investors will generally try to avoid offending you.

There is something that you can do, however. If you are comfortable bringing in new leadership, you can proactively state that you are willing to bring in new leadership if there was a collective opinion that this would be the best move for the company. If investors are interested in making a change in the company’s leadership, this prompt could give them the opportunity to explore that with you without being offensive. Alternatively, if they communicate to you that they don’t think that a change would be necessary in the short-term then you’ll know that you don’t have a team issue.