Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

What is VC or Angel Investor Role in Team Development, including CEO acquisition?

I'm in the mid-west where I raised over $1.5 million from a group of angels for a micropay solution. Money grew tight right before we were positioned for our roll out, things fell apart, and I am now looking at a restart.

I'm a failed CEO in the midwest with numerous patents covering a great potential solution, but I have no team and very limited opportunities to develop strategic partners. Ideally, I'd like to find a CEO with a proven track record to pull together a team, probably out in Silicon Valley, where it would be easier to build strategic partnerships and get the momentum needed for a successful restart.

My focus has been on seeking a co-founder who could find us a strategic partner with an established user base in gaming, video, or music, before approaching a VC. After all, VC's invest in the team more than the idea, or so I'm told.

But now I'm beginning to wonder if it might not be worth approaching VC's with the idea and patents and my desire for their help in finding the CEO who would develop the team? After all, once VC's are invested, they may insist on finding new CEO's or other top management. So perhaps if the technology is promising enough, they would consider finding the CEO as a part of their contribution pre-investment.

In terms of my need to find a co-founder CEO, what are the prospects that this need might be met by going to VC's with patents, a great idea, and a failed first attempt?

If so, do you have any recommendations for VC's or Angel Networks that might be more open to such a pitch?
Or is this option doomed from the start because it puts the cart in front of the horse?

10 Replies

Matthew Campbell
2
0
Matthew Campbell Entrepreneur • Advisor
General Purpose GO Hacker at DigitalOcean
That might be a bit of a stretch, generally speaking the founder needs to be able to get the product to at least the 1.0 phase. Being a failed CEO is fine, it means you have more experience then the other 20 year olds trying to build companies. You seem fairly down on your situation, part of being a founder means you need to be the lead hustler, if you can't get people excited about your vision and company its going to be hard to get VCs on board. I'm curious why you think you can't build a basic team, at least to build a prototype ?
Michael Brill
2
0
Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
Investors don't have benches full of great CEOs waiting for good ideas... that's the exact opposite problem they have. While you certainly may find an industry partner who needs what you have, I wouldn't be looking to investors.

To Matthew's point, you are probably not a "failed CEO." Rather, you are a CEO that failed... and there is no shortage of those. Many go on to create fantastically successful companies. It's easy to get down on yourself, especially if you live outside one of the tech bubbles. But, look at this way: you spent $1.5m amassing assets and figuring out what *doesn't* work. You raised money once and if the idea/technology is sound, then you can always tell a compelling story about why it didn't work the first time and why it will work now. Investors *love* de-risking with other investors' money.

If you can afford it personally, get back on the horse and remember why you pursued this idea in the first place. A tiny bit of success and a little bit of money will do wonders for your outlook.

Thomas M. Loarie
0
0
"Bringing Entrepreneurs and Technology to Life" CEO and Chairman, Mentoring and Coaching of C-Level Executives
Whether a VC will have the appetite to help put a team together and provide capital depends solely on the value proposition and what led to the failure you described. Another alternative is to use LinkedIN to find someone with deep domain expertise and general management skills to help you resurrect your venture. This would not be the first time a company has risen from the ashes.
Steven Schkolne
0
0
Steven Schkolne Entrepreneur
Computer Scientist on a Mission
In general before investing VCs look for traction - in terms of product/market fit. Some kind of growth, and demonstration not just of idea but also execution. Great execution is 10x more rare than a great idea. Great execution plows through ideas like silt in a riverbed to find the golden solutions. It is true some VCs will invest on team alone but IMO those are special circumstances. Certainly less common these days as VC money is coming later.

I hear something in your post, that sounds like you are looking to put together a team to get some funding. In my experience, that is the least attractive proposal to an investor. Demonstrated momentum creates an urgency. Create a sense that you'll get there either way - money will just get you there faster - and investors will be fighting to get into the round. Needing VC validation and funding for the venture to exist is all too common, and something I believe many VCs will run from.




Chris Carruth
0
0
Chris Carruth Advisor
VP/Director. Strategy | Business Development | Operations | Product | Solutions
Do you have an MVP you can showcase to potential customers? Can you get written documentation that shows their use, how they used it, what their feedback was, potential of using commercial version in the future, etc?

Traction is the holy grail as it proves initial appeal...long-term traction (consistent growth) with revenue, profitable or not, is better as it shows sustainability of the business model. Profitable long-term traction shows sustainability of the business - the "easiest" to fund.

If you can do the first (MPV/documented positive feedback) at least it shows interest and potential of app. Unless you have something that is truly disruptive (Tesla) or a cure for cancer or some other earth shattering idea, funding without proof of potential, it will be tough. Unless you have a rich family to fall back on..
Kate O'Hara 517-592-0185
0
0
Independent Financial Services Professional
Call me I have the team, investors and have failed miserably and succeed. Just need right attitude and a contract. Might have a solution. [removed to protect privacy] text....
Karl Schulmeisters
1
0
Karl Schulmeisters Entrepreneur
CTO ClearRoadmap

First off, if at all possible - avoid VCs (and angels) for as long as possible. Why?
.

The earlier in the process you bring in outside funding - the greater the risk to their funds.
The greater the risk to their funds - the greater the risk premium they want
The greater the risk premium - the less reward you have

>> Money grew tight right before we were positioned for our roll out, things fell apart, and I am now looking at a restart.<<

I think it is very very very important that you understand what failed, and why and particularly what you did and did not do that led to the failure. Not in a self-flagellating manner, but in a very honest way. Because until you can openly and clearlyexplain what went wrong - you will be the "Failed CEO" rather than the "CEO who's company failed".

In saying "money got tight and things fell apart" - that comes across as rather a superficial explanation. It may be that you were just getting past that point to describe where you are at today, and if that's the case, great. But if you really think it was just "money getting tight" - then you need to think again. Money is ALWAYS tight in a startup.

Every startup needs to feel like money is tight and there is too much to do until well into profitability. Because that is what helps focus the concentration on what really needs to get done.

If the idea is yours, you either need a CEO you really really really trust or you need to be the CEO. Because in the early stages, handing off your idea to another person is a formula for friction. And friction kills startups.

Sure if your challenge is technical, bring on a CTO
if your challenge is operational, bring on a COO

but keep the reigns in your own hands. Similarly, startups are a lot of work and very tough. I don't know of many who have the skills to be a Startup CEO, that do not want a controlling share of the equity. And as founder, if you give up controlling share of the equity - its no longer your project

So yeah, I think you ARE putting the cart before the horse

Mathieu
0
0
Mathieu Entrepreneur
Entrepreneur and Avid Adventuress
Remember VC's want a part of the action as well and rightfully, when they do their homework. If one pay a broker to sell a business, the same applies to a venture group. The venture capitalist group have one major flaw and its called REAL due diligence.
  • What is your hypothesis and are your projections based on it
  • How have you figured market share
  • What is the competitive environment
Good luck and God Bless because you'll need both. Now visit our FaceBook and as a simple act of kindness. https://www.facebook.com/VideoLocators?sk=wall

Daniel Hinden
0
0
Daniel Hinden Entrepreneur
CEO & Founder
I'd be open to give you my personal views
Jenny Bowen
0
0
Jenny Bowen Entrepreneur
Owner GLOBAL MEDIA PRODUCTS LLC
I am working towards launching my own 3D/Mobile capable Social E-commerce that is A.I guided and has video game features called T.R.U.E F.A.N.S.S. We got our Demo finished and partnered with a manufacturer for our own VR headset and we are in the process of designing an improved version. We also are looking for experienced Leaders. We are partnering with publishers/businesses to upload their Ads to our demo for free. If you know of anyone who wants free advertising please message me? Thank You!! If any of you would like more information or want to inquire about joining True Fanss please contact me.
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?