How Does Your Startup Business' Management Team Measure Up?
On Wednesday, September 29th, at an event sponsored by the Phoenix Chapter of the Thunderbird Alumni Network entitled “The Capital Process,” the formation of the Thunderbird Angel Network was announced to an enthusiastic group of Phoenix area Thunderbird alumni and other interested professionals.
As he announced the group's formation, Dee Harris, President of the Thunderbird Angel Network and long-time Angel investor, spoke to the group about the importance of having a solid management team.
“I have seen, time and again, management teams that have three people – all with the same skill set, that’s not what an investor wants to see.”
Fellow investor panelists Brian Burns of Grayhawk Capital www.grayhawkcapital.us, a venture capital firm, and Rick Deavila of Alerion Capital, a private equity firm, both echoed Dee’s position and expressed the importance of having a solid management team regardless of what level of capital a business is seeking. DeAvila said that the management team is often the most important feature of a company an investor looks at when evaluating a deal.
“Build Your Management Team,” a recent article by Steven Robbins in Entrepreneur Magazine, endorses the panelists position. The article emphasizes the need to build a senior team that's able to manage all the critical areas of your business to take it to the next level. Building your team demands matching jobs to people's strengths. That means giving people responsibilities according to skill level, not based on how close a friend they are, or how closely related they are to you, or whether you just like their sunny personality. The article covers the topic in great detaill, and is well worth the read.
If you are the founder, keep in mind that this advice applies to you as well. Don't give yourself an impressive title and job unless you're truly the right person for the job. The fact is, many smart entrepreneurs hire their own boss when they realize their skills lie elsewhere in the company.
KEY MESSAGE: Giving the proper weight to the importance of selecting a management team based on necessary strengths, and allocating critical roles in the business based on skills experience is perhaps the most critical facet of a business plan, but is often underplayed or overlooked. You can have the best new product or service idea , but if you lack a solid management team to execute upon it the idea has less value.
The Thunderbird Angel Network would like to thank all those who attended this event, and offers a special thanks to Brian Burt of Snell & Wilmer www.swlaw.com, who skillfully moderated the panel.