My answer always varies as I examine each deal, sometimes deferring and passing on an ![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2019\/02\/jockey-falling-off-horse.jpg\")
investment because of an uneasy feeling about the entrepreneur, even if the business plan seems able to capture the market.\u00a0 Speaking for others, I see VC investors jumping into deals knowing that soon they will push to replace the entrepreneur with a professional, experienced manager that the VC has vetted and trusts.<\/p>\n
Sometimes there\u2019s a real surprise after the fact<\/strong><\/p>\n I have bet on the entrepreneurial jockey numerous times and been blind-sided by after-investment behavior that completely reversed my opinion about an entrepreneur\u2019s ability to manage growth to breakeven.\u00a0 Other times, the entrepreneur went on to assemble a great team and execute the plan as it inevitably changed again and again.<\/p>\n [Email readers, continue here…]\u00a0<\/em><\/span> Although this debate will continue for ages, I tend to fall on the side of betting on the jockey, simply because it has been a rare business plan that did not change again and again seeking a successful model in the marketplace.\u00a0 And great management can morph a company to adopt without destroying the culture of the company in the process.<\/p>\n What if you see a great idea but no team to execute?<\/strong><\/p>\n Concentrate on a world class team<\/strong><\/p>\n So, if you are one of the entrepreneurs without experience or ability to take your great plan to market, admit this early and form a team that investors can trust to do this, personally stepping into a position that fits your core skills, be it marketing, sales, development, or other areas required by a young company.<\/p>\n It would be refreshing as an investor to meet an entrepreneur with a great plan and a pre-formed management team fronted by the strongest possible leader, even if the entrepreneur offers to take a back seat in order to make the vision a grand reality.<\/p>\n","protected":false},"excerpt":{"rendered":" Early stage investors have been arguing over this for years.\u00a0 Do they bet on the entrepreneur (jockey) or the business idea and plan (the horse)?\u00a0\u00a0 This is serious stuff.\u00a0 If you are looking for money, this question will certainly come … Continue reading ![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2019\/02\/Jockey-horse-300x195.jpg\")
What if you were the investor and someone walked into your office handing you a business plan executive summary that floored you with its brilliance?\u00a0 And what if that person admitted immediately that he or she had no team and was not the person to take this plan to market?\u00a0 Would you, as an investor, plow money into the plan and help to incubate the idea into a real enterprise?\u00a0 I would not, nor would most all of those I co-invest with.\u00a0 There are millions of great plans that failed over the years for want of a great management team.\u00a0 And I am sure there are many, many average plans that developed into great companies with the help of a great team.<\/p>\n