Advancing today's founders into tomorrow's leaders
INVESTOR PROGRAM
Investing in early-stage startup companies is a dicey business; risks are huge, but so are the rewards. As an investor, you are challenged with picking winners out of a vast pool of potential opportunities.
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While every investor maintains their own thesis or methodology, there is no set “formula” for successful startup investing. Startups fail at an alarming rate due to a myriad of factors beyond your control; you are comfortable with this and know that a significant percentage of your portfolio will fail. Of course, you hope that the winners you’ve picked will eventually more than make up for those losses.
While no set formula guarantees success when evaluating potential startups, there is one factor that all startups share: the Founder. Here at Founders to Leaders, we believe that the strength of the Founder may be the single most deterministic factor in the success of the startup.
THE STRENGTH OF THE FOUNDER MAY BE THE SINGLE MOST DETERMINISTIC FACTOR OF SUCCESS
ASÂ THE INVESTOR, YOU WILL CONSIDER QUESTIONS LIKE:
LEADERSHIP
Is the Founder ready to lead the company- either directly or by example, or (hopefully) both? How will they handle the stresses? Will they exude calm or chaos?
TEAM
How strong is the team? Has the Founder surrounded themselves with quality individuals to help advance the company? Will the Founder be able to attract top talent as the company grows?
INVESTOR RELATIONS
Will the Founder communicate clearly and effectively with you, the investor? Will they appreciate what you bring to the table, and accept your assistance when appropriate?
REPRESENTATION
Does the Founder’s story fit well with the company? Will they be a tireless ambassador and evangelist for the company? Will they represent the company with enthusiasm and integrity in front of partners and customers?
ENTRENCHMENT
What if the Founder burns out, becomes ineffective or worse- becomes entrenched. How hard will it be to move or replace them?
GOAL ALIGNMENT
Do the Founder's goals for the business align with yours? Is the Founder seeking a lifestyle business when you need a 10x return?
An easy way to sum up the importance of the Founder in your investment decision is to ask the question: All else being equal, would I prefer an experienced Founder with a successful track record or a first-time entrepreneur with no experience?
Of course, we would all choose to invest in the more experienced Founder.
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Unfortunately, you don’t always have that choice- especially if your investment practice is focused on early-stage companies. You will need to place bets on inexperienced (though undoubtedly bright and passionate) Founders.
YOUR INVESTMENT RETURNS INCREASE WITH THE QUALITY OF THE FOUNDER
This is where we come in. At Founders to Leaders, we believe that your investment returns increase with the quality of the Founders within your portfolio. We are here to help coach and guide your Founders, enabling them to become the best leaders they can be.
Imagine you have the familiar investment opportunity which “checks all of your boxes”; it fits your thesis, due-diligence looks good, strong team, etc. The Founder is the technical lead, and currently wearing the CEO hat, but has very little startup management experience. Consider the following scenarios and outcomes, all of which represent an investor "win":
SCENARIO A:
You’d like to go forward with your investment, but you need some insurance before you place your bet. You contract with Founders to Leaders to craft a coaching engagement for your Founder, protecting your investment, knowing that you’ll get the best version of your Founder that they can be.
SCENARIO B:
Your Founder brings a coach from Founders to Leaders into the deal. Take the bet! You know that your Founder already has the insight to recognize that they will need help, and is well along their path towards becoming a truly world-class leader.
SCENARIO C:
You propose a coaching engagement as a part of your investment terms. The Founder pushes back, suggesting a resistance to receiving help, and a naiveté towards the challenges they face. Pass.
SCENARIO D:
You are competing for the Lead Investor position, and the Founder is taking a close look at your “value adds”. You bring a lot to the table, but so do the other investors. Adding Founders to Leaders to your offering will let you differentiate as “Founder Focused”, and help you secure the deal.
OUTCOME 1:
Your Founder, with our help, has blossomed into truly effective leader. Your company is hitting its milestones, and you’re well on your way to a significantly higher valuation during the next round or exit. You have developed a strong relationship with your Founder, who pulls you into their next exciting venture.
OUTCOME 2:
Your Founder hits a tough patch, and through their work with Founders to Leaders, recognizes that the company needs a different skillset in the appropriate leadership position. They come to you, and are proactively engaged in advancing the interests of the company and shareholders. At Founders to Leaders, we believe that helping a Founder recognize their limitations is just as important as celebrating their strengths.
OUTCOME 3:
The Founder disengages from their coaching relationship. This is critical information for you, which may be indicative of larger issues. This provides an opportunity for you to have a direct conversation with your Founder, and likely represents an inflection point that you would have otherwise been unaware of.
Founders to Leaders provides essential insurance and protection for your investments by working directly with your Founders. We believe the first question you should ask of your prospective Founders is:
"DO YOU HAVE A COACH?"
CONTACT
Founder Coaching is currently by invitation only. Please feel free to inquire for more detail.
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If you represent an investment group and are interested in helping your current and future portfolio companies, please send us a note.
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If you are interested in our Executive Coaching services, please drop a line and let us know how we can help.
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