Apr 22 2008 by Jason

Do I Need a Team To Raise Venture Capital?

Q: How important is having a partner?  As a sole entrepreneur that’s investigating venture capital, is having a partner typically required? What are the justifications to requiring a partner?

If I pursue a venture capital firm without a partner or team, is that a show-stopper?  Can I explain that finding a partner is difficult, or are there no options at all?

A: (Jason).  In my opinion, it is mandatory to have a partner and / or team to raise venture capital.  There are several reasons for this:

1. No single person can do everything.  Everyone needs a partner to balance out his/her actual or perceived weaknesses.  I’ve not met anyone who can do absolutely everything from product vision, executing on a plan, engineering development, marketing, sales, operations, etc.  There are just to many mission-critical tasks in getting a successful company launched.  You will be much happier if you have a partner and / or team to back you up.

2. It’s not a good sign if you can’t get others to get excited about your plan.  It’s hard enough to get venture capitalists to write checks to fund your company, so if you can’t find other team members with the same passion and beliefs as you, this is a warning sign to anyone that might want to fund your company. 

3. If you don’t have a team, what is the venture capitalist investing in?  Just as important as the idea is the team executing it.  In fact, I think most VCs would tell you that they’ve made money on "B" ideas with grade "A" teams but that many an "A" idea was left in the dustbin due to a substandard team. 

The one exception would a repeat entrepreneur.  If the venture fund has had a good experience with an entrepreneur before and believes they can build a solid team post-funding, then he / she has a chance to get funded as a sole entrepreneur.