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Angel investor or VCs take on a Solo-founder Startups?

Obviously, a startup with a team of cofounders vs one with a team of employees has its pluses and minuses (I do not think either is better). Despite many going the "co-founders" route, personally I lean towards a solo-founder with a team of employees, for reasons some will understand and some won't.

So questions is: In your experience, are angel investors, VCs, etc willing to invest in a startup comprised of solo-founder and employees?

10 Replies

matt
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matt Entrepreneur
Web Developer
.... Sent from my iPhone
Arthur Lipper
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Arthur Lipper Entrepreneur
Chairman of British Far East Holdings Ltd.
The number of founders, some of which make a cash investment, is not as important as the scope of the endeavor and the qualifications of the CEO.
Mark Lieberman
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Mark Lieberman Entrepreneur
Chief Startup Officer and Director, Advantage Accelerator at Oregon State University
Investors bet on the team. A solo founder is acceptable with a few provisions: key man insurance AND a good secession plan with at least one or two employees that can fill in rapidly.

Additionally, I usually require an ESOP for employees. I probably would not invest without one.
Tom DiClemente
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Tom DiClemente Advisor
Management Consulting | Interim CEO/COO | Coach
It's going to depend on how you come across as a solo founder with the management team otherwise filled by salaried employees. For a startup, given the same set of necessary skills, that usually means a higher payroll. But most of all, the question is, does the key management team have skin in the game and some anticipation of upside. If not, the question becomes whether they have the motivation to see things through to building a well performing self sustaining company, or through to a profitable liquidation, whichever is the goal.

Additionally, I don't see why you prefer one over another if you're the entrepreneur? Which direction you take usually depends on the team that can be assembled to build a successful company and not on your personal preferences.
Nofyah Shem Tov
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Nofyah Shem Tov Entrepreneur
Founder BlogMyLunch
If you go it alone, you better have a well of energy for the first year. You'll be marketing, selling, advertising, tech support, customer service, etc. My advice is to automate as much as possible. Nofyah
Martin Omansky
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Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
Yes. We invest in what is in front of us. If the team needs beefing up, or if the enterprise needs any sort of amendment, we can help to supply it. The governing item we look for is the business opportunity, which for our groups, are opportunities to exploit substantial technical or scientific breakthroughs. Other factors, which may also be important, can be added to the mix. The rare commodity for us is the significant business opportunity produced by a sustainable comparative advantage. Others may have different criteria, and that is OK, too, because it is a very big world, and opportunity takes many forms. Sent from my iPhone
Andrey Stegno
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Andrey Stegno Entrepreneur
Founder at Cardsaround
What if I am solo founder but already have income?
Martin Omansky
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Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
Andrey: What does your income have to with the question? Sent from my iPhone
Mike Robinson
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Mike Robinson Entrepreneur
Chief Commercial Officer at VideoEngager
I don't think founder status is really the question. The question is whether the team is up to the task.

Sure, there might be one founder but if she has recruited some employees who are talented and experienced and are putting skin in the game -- well, that almost makes them co-founders (even if they joined 6 months or a year later).

If there is just one executive and some paid low-level employees or interns, that increases the risk factor around the team. It indicates that the founder either: a) couldn't attract high-caliber partners, or b) doesn't play well with others and doesn't want partners, or c) this idea is so small that it only needs one executive.
Michael Barnathan
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Michael Barnathan Entrepreneur • Advisor
Co-Founder of The Mountaintop Program, Google Alum
Most VCs I've spoken to in the past have considered solo founder a risk, albeit not an insurmountable one. In general, it is harder (but not impossible) to get investment as a solo founder and it is harder (but not impossible) to get into an accelerator as a solo founder. There may have been some softening of this position since then.
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