Building a Fundable Team August 15, 2012

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Jess McLear

•  Angel  investor  and  member  of  Launchpad  Venture  Group      

•  Por<olio  companies  fall  into  many  sectors  including  manufacturing,  IT,  medical  devices  and  consumer  goods    

•  Board  seats  include:  Zyrra  and  3Play  Media  and  other  

•  MassChallenge  mentor  

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Building the Team?

•  Probably,  the  most  important  investment  criteria  for  any  angel  group  and  VC  

•  May  not  need  all  the  parts  of  team  in  place  before  funding  –  need  enough  to  see  the  pathway  to  a  great  company  

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The Good, the Bad and the Ugly

•  Ideal  fundable  management  team  – 3-­‐5  CxOs  on  their  3rd  startup  together  aNer  2  very  successful  M&A  /IPOs,  leveraging  their  experience,  market,  and  product  knowledge.  

•   Non-­‐fundable  management  team  –   1-­‐2  1st  Tme  entrepreneurs  in  a  space  that  they  have  never  worked  in,  with  no  product,  no  IP,  no  business  plan,  nothing.  

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Who is Fundable?

•  3  engineers  in  a  room  do  not  make  a  fundable  team,  unless…  – Experienced  advisors  

•  IdenTfy  strengths  and  weaknesses  •  Fill  in  the  gaps  

– Previous  company  experience  

– Always  thinking  forward  

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What are investors looking for?

•  CEO  –  proven  leader,  a  visionary,  capable  of  selling  to  customers,  investors,  media,  must  be  in  charge  

•  CTO  –  capable  of  managing  development  as  company  grows  

•  CFO  if  financially  complex  

•  Can  be  added  later  –  Sales  &  MarkeTng  

•  someone(s)  to  sell  &  idenTfy  what  the  target  market(s)  are  willing  to  pay  for  

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Measuring the CEO

•  What  do  people  who  have  worked  with  you  say?  

•  Have  you  managed  people  before?  

•  How  much  financial  responsibility  have  you  held  in  the  past?  

•  Can  you  sell  –  can  you  communicate  the  vision  to  key  customers  you  need?  

•  Do  you  play  well  with  others?  •  Are  you  a  leader?  •  Are  you  a  visionary?  

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Key Characteristics

•  Honesty    •  Leadership    •  Vision    •  Coachable    •  Accessible    •  Intelligence    •  Driven    •  Good  communicaTon  skills    

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C oachability

•  Do  you  listen?  

•  No  one  is  the  perfect  CEO,  has  the  perfect  team  or  business  plan  –  need  to  take  advise/criTcism  and  turn  it  posiTve  -­‐  use  it  to  shape  your  

vision  

•  Have  confidence  but  don't  be  stubborn  or  arrogant  -­‐  investors  can  smell  it  a  mile  away  –  investors  need  to  know  that  if  there  is  a  problem  or  a  block  in  the  road  for  

the  company  you  and  the  team  are  going  to  listen  to  advise  from  the  board/  advisors  and  be  willing  to  make  a  pivot/change  for  the  benefit  of  all  

•  Not  as  easy  as  it  sounds  -­‐  need  to  always  keep  the  company  (make  money!)  in  the  front  

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Culture and the Organization

•  The  management  team,  primarily  the  CEO,  creates  the  corporate  culture    

•  Everyone  needs  to  wear  a  lot  of  hats  in  the  early  stage    

•  There  must  be  an  environment  of  openness  to  foster  innovaTon  and    

•  Solve  real  business  problems  

•  Surround  yourself  with  strong  boards  of  advisors  and  directors    

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Timing for Transitions

•  Stay  ahead  of  the  curve  •  Best  negoTated  up  front  •  Founder  may  not  always  be  the  CEO    

•  Great  connecTons  oNen  make  transiTons  easier    – Use  your  board  and  board  of  advisors  

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How do you do it?

•  Know  your  strengths  and  weaknesses  –  work  to  fill  those  gaps  in  both  the  long  term  and  short  term  

•  Surround  yourself  with  a  strong  board  of  advisors  

•  Ask  quesTons  to  anyone  that  will  listen  

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Jim  Woodward  Entrepreneur  

Gus  Weber  Polaris    

Venture  Partners  

Beth  Marcus  Playrific,  Inc  

Jess  McLear  Launchpad  Venture  Group  

Moderator  

Speakers  

Building a Fundable Team August 15, 2012

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