A company’s ability to secure financing heavily depends on its team’s expertise, role clarity, and ownership structure. Investors seek teams that can convincingly demonstrate their capability to execute the business plan, while minimizing risk and maximizing potential returns.

Key factors for success

1. Demonstrate team uniqueness and competence

A company should be able to clearly answer why its team is the best in the market to solve the relevant problem for which the company is building a solution, and to provide evidence of the team’s capability to execute the envisioned business plan.

2. Align roles to maximize team value

Each team member should have a role in which they can provide the most value, which may not always be the role with the most prestigious title.

3. Understand the impact of team quality on valuation

The quality of the team can directly or indirectly affect the perceived risk and expected potential of a company, thereby impacting the company’s valuation.

4. Leverage advisory board expertise strategically

Good advisory board members may be valuable even for a company with a highly experienced founding team. The board members should bring different types of experience that complement the founders’ strong domain expertise.

5. Own the core fundraising process

A company should not outsource the core of its fundraising efforts to an external consultant. However, it can be highly beneficial to seek advice and support from trusted individuals with greater fundraising experience and potential connections for warm introductions.

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6. Maintain a clean cap table and ownership structure

A company should strive to have a clean cap table with as few passive shareholders as possible. If such passive owners remain at the time of fundraising, the cap table is likely to be restructured with the help of VCs investing in the round. The company’s core operational team should retain large ownership stakes that remain significant, even after potential dilution from future funding rounds. 

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