I got a call the other day from a young entrepreneur who’d heard we had started Leap Ventures, and that we’d invest in companies like his.
Mistake #1: don’t call someone, send an email. In the email, you can structure your thoughts correctly, and you won’t be bothering that person who’s probably in a meeting and probably will want to send your info to the right analyst anyway. At Leap, send your pitches to firstname.lastname@example.org.
Mistake #2: Learn about the investor before you contact them. This will be the subject of a whole other post some day.
Him being the son of an acquaintance, I listened to him (tip: relationships and intros matter a lot, find someone to introduce you) tell me how he has this app he’s making, and that it’s a social network, and he’s looking for funding. I didn’t even ask him any more details about his app, nor anything else except for a single thing: does he have cofounders?
The answer was, predictably in the MENA region, “no”. I asked him how he was going to make his app. He said he had the whole flow and wireframes designed, down to each specific function and tap. But that he was getting quotes from dev agencies, and he was looking for funding.
Of course he’ll be looking for funding if he has to use an agency, and it didn’t occur to him that no VC would want to be funding an agency, which is exactly what we’d be doing if we were an early stage investor (which we’re not) and we were to invest in his startup. As VCs we are looking to invest in the growth and long term potential of a team.
What’s worse, he was candid enough to admit that he’d looked for a technical cofounder in Europe but just could not find the right chemistry with anyone because techies are weird. That rang the alarm bells of armageddon in my brain and I had to tell him that if he couldn’t get along with a team of techies, let alone a single tech person, then he had no business leading a tech startup.
Launching a tech startup is extremely hard work. It takes more energy than you have, more time than you have, more resources than you have, and more expertise than you have. Doing it alone is the kiss of death. Doing it alone because you can’t part with equity and/or control shows a lack of maturity. Doing it alone because you can’t find anyone to complement your skill set shows a lack of resolve, something that you’ll need in bucketloads in the years ahead.
You have an idea, good! You’re willing to bet the next 10 years of your life building a company from it, good! But those are just the first (and easiest) steps. The next step is to convince two people (friends, classmates, etc…) that your idea is worth them spending 10 years on it. If you are a techie, find a business person and another in operations or marketing. And vice versa. If one of them has access to money, even better. Give each 10-30% of the company depending on what they bring to the table. This will be the core founding team.
Do not start your company without the core team that has all major functions covered. Learn to work together, in good times, bad times and the unexpected but common worse times.