As Co-founder at Eden Scott having run my own company for 13 years as well as investing in a number of other small businesses, I know how important the right leadership team is to securing the funding for small business.
Last month’s EIE19 was another fantastic showcase of the entrepreneurial talent that exists in this country. 50 slightly nervous entrepreneurs diligently delivering their pitch to secure the funding for their small business that could make all the difference.
Delivering a killer pitch is a vital part of the process and you need to have your best presenter on the job. However securing funding for small business is so much more than one pitch. In our experience having the right founding or leadership team is important to giving the investor’s confidence.
Having invested in a number of small businesses and run my own company for 15 years I know how important having the right founding team is to a successful scale up.
There are obviously a number of sources for this but the first thing any potential investor will look at is the founding team and how well they operate. Obviously there are other elements to a successful company but for an investor they very much start and finish at the feet of the founding team. If there is no faith in that team then there is unlikely to be any funding.
So what are they looking for?
For there to be any chance of a business successfully getting to the next stage there needs to be a clear vision that everyone buys into. The founding team have to provide that vision and inspire the passion and drive throughout the rest of the organisation to ensure everyone is pulling in the right direction. Discussion and debate is at the heart of successful business leadership but as a founding team it is essential to present a common vision.
It’s important there is a sense of purpose and a duty of care for the business entity and its people. While the leaders of the business are focused on delivering success it can’t be to the detriment of their team.
Investors are also looking to be assured that the people running the team have the requisite skills to make a commercial success of the business. They want to see a significant return on their investment. So if they have little faith in the commercial nous of those in charge they will take their money to the next start up or they will replace those in key positions.
Potential investors need to have faith in the strength of the founding team. Tough decisions need to be made and made quickly. If there is a sense of indecision among the founding team this won’t inspire investor confidence.
Stomach for a Fight
Building a business is hard work. Investors are looking for people who have the stomach for the fight, who will work the long hours and lead by example, setting the tone for the business. As mentioned investors won’t accept passengers and will quickly identify the weak link in the team and will want them replaced.
Finally, something I’ve noticed is that the best businesses out there all generally seem to be having fun. They know how to work hard but they are all acutely aware that it’s essential to enjoy what you do too.
There are a number of elements that have to come together to secure the vital funding that could make a difference to your small business. However, I’m a firm believer that you need to have the right leadership team in place, at the right time, to give potential investors the confidence then need to fund your business.