100+ screened companies led to 3 observations and an open question: which matters more, team or market?
Blog post by Ira Stening
2018 was my rookie year with the Finnish Business Angel Network. Investors more senior to me had recommended to participate in as many screening events as possible. I took the advice, participated in the Wednesday morning screening boards throughout the year and found myself screening the one hundredth company in early December.
Just as I had been told, the benefits of participating in the screening boards were many: the reviewing of business ideas is as professionally rewarding as it is fun for a curious person like myself. I feel privileged to have met all you startup savvy co-reviewers. I am also thrilled about having had the chance to talk to a number of strong-minded entrepreneurs. Yet another benefit is of course connecting with the energetic FiBAN team including Reidar, Heidi, Reetta, Amel and Wasim. For me all this adds up to a significant learning experience. Beyond that, I am pleased to actually have helped a number of entrepreneurs and companies ahead on their growth path.
The rightful question is, what now - what to do with the accumulated knowledge? Well, so far I have three key takeaways.
#1 Startup: be clear what you are asking for
FiBAN with its 660 members is an internationally recognized hotspot of active private investors. Last year 272 companies were screened out of which 111 earned themselves a spot at the Pitch Finland event and therefore continued their journey towards external funding and resources.
I have come to witness that the members of FiBAN are exceptionally willing to offer a range of helpful resources to your business idea or company. All colleagues are generous with sparring to further the competitiveness of your idea, leveraging on their network to find team members or pilot projects or to direct you to sources of equity. My recommendation to startups is - be clear on what you are asking for already at Pitch Finland or another stage of early interaction. How much are you raising, and why? Do you need board members, or maybe advisors? In addition to cash, what sort of a help are you expecting to find from FiBAN members? This demonstrates/shows that you have thoroughly considered various angels as your best option for funding.
#2 Wanted: Diverse teams with attitude
The pitch decks I have come across are in general well prepared and come with a professional touch, giving the reader a basic understanding of the business idea at hand. In a deck a solid team is one of the more obvious things to spot. To me solid equals diverse. Diversity in professional and educational background. Why not also in age, nationality or gender. Furthermore, a team that is able to demonstrate a balance between commercial/client facing expertise and subject matter expertise and/or tech gets noticed.
However, team diversity alone may not do it. In real life, it seems, attitude and willingness to cope in a continuously resource-constrained setting are the traits that matter even more. Pitch materials may indicate something about team capability, however, these traits can still best be conveyed in live settings.
#3 What is a strong market made of?
What matters more: team or market? Can a solid team select the market with the most traction or does it get stuck in markets it knows the best?'
There are several ways to initially size up a market. To spot attractive markets or pockets of growth I tend to ask myself questions like:
There is also a myriad of open data & stats out there updated by national statistical agencies and industry organisations that can provide cues on the market and it´s expected direction. I am fully aware that all this may be cumbersome to check out in the screening context. However, organisations like Statistics Finland and global peers are a valuable source to collect additional data points for the business case regardless if you are an investor or a start-up.
No surprise that team dynamics are essential to startup success (and failure) as the team is so much more than a bunch of employees. For sure diversity matters and even more so does can-do attitude. Does this imply that a solid team can pick the most rewarding market to operate in? Or is it possible that even the most knowledgeable and energetic team could get stuck in a market pocket it knows the best?
To answer those questions I am headed to collect further data and learnings about the magic interaction between teams, markets and thriving startups. Continuing on the screening path towards the next 100 companies I will surely keep my senses open for more evidence. As a potential investor and growth advisor I strongly encourage also companies and boards to keep an eye on the team and the market in pitch decks, as well as in daily operations.
About the author
Ira Stening is a growth driven business strategist with 20 years of experience in consultative sales, creation of digital information services, efficient strategy work and team leadership. Her experience ranges from working in multinational corporations in the construction, telecommunications, utilities and retail industries to delivering growth & renewal as an advisor to publicly listed companies and growth businesses. Her way of working on growth company boards is collaborative and based on sharing of ideas and networks.
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