There are many things an investor has to consider when weighing up your business as an investment opportunity. One of these is the leadership team behind your idea.
The leadership team are those at the very helm of your business, navigating it to success. As such, a strong team can be critical to whether you achieve your intended goals or if inefficiencies, setbacks and issues mar your progress.
Due to the vital role they play, it comes as no surprise that investors are interested in the people who will be running your company. When scrutinising the team, there are certain aspects they are looking for, such as valuable experience, skills and communication. As with everything else included in your business pitch, you need to convince them that you have exemplary leadership to keep your enterprise on the right path and secure their return on investment.
Below, we have listed five steps to creating a robust management team that will set your venture on solid foundations and win over investors.
- Fill the gaps in skillsets
- Focus on experience
- Develop soft skills
- Show communication and chemistry
- Share a joint vision
Fill the gaps in skillsets
By the time you are considering approaching investors, you may already have established the top-level people behind your company. This could include you and any co-founders or partners you will be working with. Each of these individuals will have their specialities. However, it is crucial to identify any skill gaps that aren’t being covered.
Start by understanding the skillsets of your existing team. This will likely be aligned to the roles they will be undertaking – for example, you would expect a CFO to have sound financial knowledge and a CEO with excellent business insight.
Once you’ve listed these skills, look at where any gaps lay. Are you missing critical skills that may directly align to strategies or roles you need, such as marketing, sales or operations? If so, you need to consider how you will address these. This might include recruiting relevant people into your company, using non-executives to give you more credibility or showcasing your recruitment plans to investors.
Ensuring all skills have covered will prevent investors from finding holes within your team, which could translate to issues with your business model. Instead, you will show that all areas have been considered with adequate resource in place to head your various strategies and operations.
Focus on experience
Experience matters as it provides evidence of your team’s ability to do their job. So, when aiming to demonstrate the strength of management, you need to draw in the relevant experience.
‘Relevant experience’ could encompass any previous work a team member has done that could be associated with your business, such as work within the industry, a similar position or having been part of a team that has been on this journey before. It could also cover any achievements they have made that prove their skills. If you have already been working as a team, you can also include any collaborative achievements to demonstrate your ability to work together.
Your team needs to be prepared to face some scrutiny from investors. So, if they have any failures or gaps in their business experience, there is little point in covering it. Instead, focus on the lessons learned by these failures and how it has made that individual even more able to fulfil their role within your company.
Develop soft skills
Each team member will require specific skills aligned to their respective positions, such as finance, sales or business development. But beyond this, they will require so-called ‘soft skills’ that reinforce their ability to work as a team and be efficient.
Soft skills could include leadership, organisation, communication, punctuality, resilience and flexibility. These are universal skills to the various job roles within your organisation but are essential to running a smooth operation where challenges are overcome, and deadlines met.
As well as their role-based skills, aim to portray the soft skills and characteristics that your staff have and how this strengthens your team as a whole.
Show communication and chemistry
On top of the focus on each leader as an individual and their specific strengths, you need to prove that your team works collectively. Investors want to see a team that has longevity and work together well throughout your company’s journey. This boils down to the chemistry of the group and your ability the effectively communicate with one another.
This doesn’t necessarily mean you and your colleagues must all be best friends. However, you need to collaborate and avoid disagreement or issues that could result in disruption, unexpected staff turnaround, or a toxic culture.
When presenting your team, aim to show a strong working relationship with members able to support each other and work together to ensure your business’s success. This will particularly matter as you look to bring new people on board to the company, creating a harmonious environment that will continue to deliver results as you grow.
Share a joint vision
As per your business model, you should have a clear vision of the trajectory your enterprise will take and the values you will implement daily. Your entire team must be on board with this, particularly those at the senior level.
The key to this is ensuring necessary documentation is shared with the team, so everyone is aware of the agreed strategies, understands the value proposition and is fully aligned to your mission. With this, you can keep everyone on the same page and help the team to work in conjunction.
As well as understanding the vision, everyone in the team must believe in it. This means having confidence that it will work and that your company is the perfect solution to the issue you aim to fulfil. If your leadership team isn’t optimistic about your business’s prospects, there is little reason for an external investor to be. If someone isn’t passionate about the company, it could showcase doubts or a lack of motivation to see it through – and this needs to be addressed before it affects your results.
Conclusion
There are many reasons why your management team matters. Firstly, they are responsible for leading your path to success, resulting in profit and favourable results for your business. On top of this, as you start to grow, people will look to these people as leaders to guide their role in your business, and a strong team has a better chance of motivating staff and ensuring buy-in.
Finally, a great leadership team is key to attracting investment. Investors will rely on this team to deliver a return on investment. They may even work closely with you during their relationship with your business, so it is natural for them to want to scrutinise it. By focusing on strengths such as previous experience, skills and chemistry, you will convince investors that you are the right people to charter the company and deliver the results they want to see.
If you need support in getting investment ready, whether putting together your leadership or preparing a pitch, we are here for you. Our expert advisors have worked with several SMEs to secure valuable investment and move them towards their growth ambitions.
Find out more about our services or get in touch today to start your investment journey.