While Team, TAM and Defensibility are good rules of thumb to get the attention of a VC and earn your right to the second call, the truth is (at least at the Seed and Pre-Seed stage) that “Team” trumps all of these other factors.
Good entrepreneurs are very, very rare. They really are like 1% of 1% of the population. Their brains are just wired differently than the rest of us.
They exhibit the rare combination of the “Three I’s”:
- Intelligence
- Integrity
- Intensity
The culture, direction, and success of a startup are deeply tied to its founders. Strong founders with a clear vision are essential for guiding a company through its most challenging phases.
They have a restless fire that burns in their belly and often a chip on their shoulder that motivates them.
At the seed stage (the stage at which Automotive Ventures invests), the founder (and/or founding team) is on a relentless quest to discover evidence of product/market fit, yet able to stay open-minded like a child and receptive to feedback.
An early-stage founder needs to almost necessarily maintain a reality distortion field (a term first used by Bud Tribble at Apple Computer in 1981 to describe company co-founder Steve Jobs's charisma and its effects on the developers working on the Macintosh project). A talented founder is able to manifest their own destiny while simultaneously rallying followers to coalesce and take action to realize their vision of the future.
They are great communicators; master storytellers; able to convey big concepts and win over others.
Great founders just make things happen.
Having said all of the above, we don’t expect to find Superman/Superwoman. We know that no person can possibly index at 100% across all attributes. This is why founders have to be a magnet for recruiting stellar talent. They need to find a way to surround themselves with a team that will compensate for any weaknesses/gaps and can quite simply get things done.
A famous quote by George Doriot, who started one of the first venture capital funds in 1946, said, “...any day of the week I’ll take an A-Team with a B-idea over a B-team with an A-idea.” Giving an A-Team a B-Idea will result in an amazing company. But giving a B-Team an amazing concept usually ends up in pain and failure.”
With age, I’ve grown to appreciate that the scarcest resource on the face of the earth is good talent.
We’re on the lookout for exceptionally talented founders building incredible companies.
Join us on the journey,
Steve Greenfield
