“Always consider investing in a grade-A team with a grade-B idea. Never invest in a grade-B team with a grade-A idea.”

This principle explains why a great founding team is so important for a startup’s chances of success. Here’s why team composition matters so much from the perspective of a VC:

🥸 Complementary skills and experience. The best startups tend to have founding teams with complementary skills. Almost four-fifths of new companies are starting up as two-founder businesses, according to research. The two co-founders will have different core competencies (e.g., the technical co-founder might be the CTO, while a business-focused co-founder might be the CEO/CRO).

🧙🏼 Agility and adaptability. The market is the ultimate judge, and a startup must be ready to adapt its product and business model to match market feedback. The founders’ team must also act quickly with minimum bureaucratic delays, and for this, a lean, agile team is a must. The core team of even a large tech startup is usually made up of the CEO, CTO, CSO, CMO, and a few key support personnel.

🪢 Early team members should be T-shaped, possessing a broad range of skills while being deeply specialized in one area. This is going to be beneficial at an early stage since you want everyone to wear multiple hats. A functional specialist can be hired as the company grows to help scale operations, marketing, sales and customer support.

Different roles within the founding team are critical for a startup's success:

• The innovator is the author of the product or the product’s chief architect, and is shaping and driving product development. He also has an understanding of when and why customer needs are not being met. Past examples include David Filo (Yahoo) and Steve Wozniak (Apple).

• Where the innovator creates his vision of a future product, the Validator focuses on the target customers of this future product: who the buyer personas and other early adopters are, where the early adopters can be found, and how the innovator can attract them. The Validator is often someone who has held a product marketing or product management position. At Aruba Networks, for instance, the Validator is a self-described product designer/tech marketer named Pankaj Manglik.

• The Implementer makes sure that the product is built correctly. Typically a Director of Engineering or VP of Engineering, the Implementer is key to creating the MVP, and developing it into a product ready for sales. This role is most important, where much of the budget is invested in product development.