Entrepreneurs can greatly benefit from bringing someone with startup experience to their businesses to gain outside perspective, reassurance and skill diversity

At Cerius, one question we get asked a lot by entrepreneurs is: “Do I need to bring somebody on my team with startup experience before to be compelling to investors?” We put that same question before three distinguished CEOs with decades of experience with startups and Venture Capitalists (VC’s) on the Cerius Business Today podcast.

They shared their insights and advice on bringing somebody with startup experience on board and how it would impact the business from an investor’s point of view.

Startup Experience Brings Outside Perspective

Entrepreneurs are deeply passionate about their ideas and products. So much so that they can be blind to warning signs if the business is going down. Having somebody from the outside, be it a board member, an advisor, a coach, or a COO, gives your team an objective input that only comes with an outsider’s perspective.

Investors prize teams that aren’t boxed into their own thoughts and have the capacity to understand the demands of market and technological changes. If this is your first venture, investors might be skeptical that you’re too in love which the technology to be able to adjust and be flexible as needed. Having an outsider with previous business experience can help ensure you stay objective in major business decisions.

Kevin Gibbs has been with four startups from angel funding to the final sale of the company and works with turnaround companies. He says, “Somebody from the outside with startup experience will often be able to give you better advice about when to get out, when the market’s slowing, when it’s growing, when it’s not and so on and so forth because they have seen it before, they’ve done it before. They’ve got the T-shirt. “

Reassurance

VC’s always look out for their investment and invest to get returns. Kevin says, “Investors are going to want a return on their investment and at the end of the day you have to remember that it is their money. They are not giving it to you as a charitable institution, they are giving it to you because they are running a business. The investors want a return on their money, the VC wants a return on their money.”

The advantage of bringing somebody in from the outside is not always for augmenting the technology. It is to support the size of the business, growth patterns, and give the people invested in your business a reassurance that ultimately they will get a return on their investment since that is their ultimate goal.

“Often you’ll find that [the founder] is in love with the technology and they are in love with the idea — which is great. You need to be in love with the technology and the idea. But you still need to execute. It still needs to be a business,” advises Kevin.

Skill Diversity

Jeff Greenberg is a serial entrepreneur with 25 years of experience in the high-tech community and with technology based startups. He believes says investors invest in teams that have a complete skill set. He says, “A lot of people use the term entrepreneur and innovator, interchangeably. But I believe there is a substantial difference. Most people who start companies are actually innovators who are great with technology, but maybe not so good at executing a business.” You need to have both.

Those people who lack business skills should either learn the ropes of running a business or bring somebody on board who is capable of steering the ship, leaving the founder to focus on the technology.

Oftentimes, the innovator is not interested in learning the business side of things as it may not fit their personality, and will instead happily accept the title of Chief Technology Officer (CTO) instead of CEO.

“Investors are always reassured knowing there is somebody there who knows how to execute the business beyond the product or technology itself,” says Jeff about having an experienced outsider on deck.

There are different theories on bringing in somebody with experience over non-experience, but generally investors prefer people who have done it before. If they have failed in the past, some argue that they will be a better leader because of that hard lesson while others say that they can fail again like they once did before. Jeff leaves that up to be debated over the years to come.