What makes a good management team?

One of the most common areas of concern for start-up and early-stage companies when seeking investment is the make-up of their management team, says Connor Sweeney, InterTradeIreland’s Seedcorn Programme Manager.

That’s totally understandable given that it is the number one priority for any investor when considering taking a stake in a company. Remember, investors invest in people. However as one venture capitalist said to me recently – it doesn’t have to be the dream team from day one.

Unfortunately, there is no golden rule for establishing a strong management team, and the opinions of investors vary on differing topics. One size definitely doesn’t fit all, and what fits for one company, won’t fit for another, similarly when it comes to investors.

What are investors looking for in a management team?

So, what are they ideally looking for? Generally, a management team made up of 2-3 founders with complementary skill sets. Importantly, all members of the team should have a firm commitment to the project and have significant ‘skin in the game’ and be hungry for success. At least one of the founders should have experience or be very close to the market they are planning to exploit.

A strong track record is a clear asset, as is a clear knowledge of the market. The project should be commercially driven and not just an extension of the main founder’s hobby. A definite asset in early founders is the ability to recognise skill shortages and to remain open to changes in the team where necessary – even if it means relinquishing the CEO title to someone better suited to that role.

Choose the right team members

When it comes to expanding the management team, extreme care must be taken in choosing new members. Take your time – remember you will have to work closely with new members for a number of years, and if you make a mistake, it can be time consuming and potentially very costly to extract yourself. Remember, to get something, you also have to give something, so be prepared.

It is important that new members integrate with existing staff and share the common culture of the organisation. Often the weakest areas of the team stem from the commercial arm, with perhaps a technical CEO thinking they alone can do all the early sales. That may well happen, but eventually a strong marketing arm needs to be brought on (if not already in place, of course!)

I’m often asked whether an advisory board is a useful thing at the very early stage. Personally, I think it is, as an experienced board can offer solutions to problems that the founders might not even be aware of. It is essential however that founders actually take the advice and act on it.

Importance of a Non-Executive Director

More important than an advisory board though, is the addition of a decent non-executive director (NED). In fact, some investors will insist on an independent NED being part of the investment deal. The NED will take a seat on the board and will expect payment in return. They may also act as a mentor to the CEO where required.

They will take an active role in driving and advising the business, although the business needs to have the skills in place to be able to execute that advice. A good NED will hold the executive team to account and establish good corporate governance practice, ensuring it is achieved from the outset. They can also add a touch of commercial reality to the board and will usually have the experience to ensure the business basics are established early, adhered to and achieved regularly.

When choosing an NED, do your due diligence on them – they will be doing it on you! Ask companies that they were involved with previously what they were like to work with and if they represented value for money.

In summary, having the right management team is place is crucial when seeking investment. Investors want to invest in a team that they believe in. If things go awry with the product or service, they can pivot, however, there is only one management team, so getting that right is fundamental.

InterTradeIreland Seedcorn Investor Readiness Competition

Similarly with establishing your management team, ensuring your start-up is ready for investment is essential. The Seedcorn Investor Readiness Competition is the perfect chance to get ‘investor ready’ and mirrors the real-life investment process. Not only are participants in with a chance to win a share of a €300,000 cash prize fund but they also win with free mentoring on how to pitch to investors, free advice on what investors are looking for and free insights on their business, all while boosting their firm’s profile. To find out more and to apply visit www.intertradeireland.com/seedcorn

The closing date for applications is 1pm on Friday 27th May 2022.




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