Building teams that Deliver Results & Investors
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The document discusses building effective teams for startups. It emphasizes that investors consider the management team a major risk factor, with most failures due to team problems. Effective teams have members with relevant experience and skills, established relationships with investors, and a track record of prior success together. As startups progress, they require teams with expertise in different functional areas like product development, clinical, regulatory, manufacturing, and commercialization. High performing teams demonstrate characteristics like participative leadership, clear goals, trust, and psychological safety.
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Building teams that Deliver Results & Investors
- 1. What matters most and when you need each member BUILDING TEAMS THAT DELIVER RESULTS & INVESTORS
- 2. ROLES AND NORMS: WHO THE TEAM IS AND HOW THEY BEHAVE Job Skills and Experience SocialBehaviors Strong skills and experience + works well with others
- 3. ROLES AND NORMS: WHO THE TEAM IS AND HOW THEY BEHAVE • Roles = responsibilities for deliverables divided among team members, usually correlated to expertise and experience of individuals • Norms = behaviors and dynamics governing interaction of team members
- 4. DEFINITIONS • Team = people contributing to product and its interface with customers • Investors = people / organizations supplying capital to enterprise in return for ownership
- 5. WHO IS YOUR TEAM? Founder / CEO Employees Management TeamBOD Advisors Consultants Investors Suppliers Legal (Corp. & IP) Insurance
- 6. SPECTRUM OF INVESTORS Seed / Angels (F&F) Series A Series B Series C… / IPO/ M&A Private / Family office Venture Fund Strategic
- 7. TOP 5 THINGS INVESTORS CONSIDER • Need • Solution • Protection • Market, Investment and Return • Team
- 8. INVESTORS KNOW THAT THE MANAGEMENT TEAM IS MAJOR SOURCE OF RISK AND FAILURE • VC survey: 65% of failures within their portfolio companies due to problems with the startup’s management team. • Investors report 61% of problems in their portfolio companies involved issue within the team.
- 9. INVESTOR TEAM RISK MITIGATION • Work with people and teams with whom they had success (exits) • Work with people and teams they know • Work with people and teams that had success (exits) for others • Work with teams that have worked together before • Work with teams with lots of experience
- 11. BUILDING A TEAM DILEMMA
- 12. TEAM YOU NEED DEPENDS ON: Seed / Angels (F&F) Series A Series B Series C… / IPO/ M&A Where you are in product development Where you are in fund raising Concept generation Proof-of- concept First-in- man Filing/ Approval Market Launch
- 13. TEAM NEEDS BASED ON PRODUCT DEVELOPMENT STAGE Concept generation Proof-of- concept First-in- man Filing/ Approval Market Launch Medical need Technology solution expertise Market recognition Product engineering Preclinical expertise Regulatory expertise Market understanding Clinical expertise Manufacturing Quality Supply chain Marketing Reimbursement Pipeline Sales Finance
- 14. TEAM NEEDS BASED ON FUNDING STAGE Medical expert* Technology expert* Market expert* IP attorney* *can be consultants, advisors, Board members, contractors… CMO CTO CEO Engineering/ science team Preclinical* Regulatory* IP* CMO CTO CEO Engineering/ science team Clinical team Regulatory IP* Manufacturing* CFO Quality Supply chain Marketing Reimbursement* CMO CTO CEO Engineering/ science team Clinical team Regulatory IP* VP Manufacturing CFO Quality Supply chain Marketing Reimbursement* VP Sales Seed / Angels (F&F) Series A Series B Series C… / IPO/ M&A
- 15. TEAM TAKE-HOMES FOR INVESTORS • Experience matters • Industry/ devices, investors, startups, covering all the bases • Network matters • Co-founders/team, investors, Board and advisors • Success matters • Prior marketed products, prior startup successes, prior exits
- 16. BENCHMARKING TEAM STRENGTH A structured approach to
- 17. RELATIVE MINIMUM TEAM STRENGTH FOR DIFFERENT INVESTORS & INVESTMENT STAGES Seed / Angels (F&F) Series A Series B Series C… / IPO/ M&A Private / Family office Strategic Venture Fund 12 36 48 80 16 40 60 88 24 52 72 100
- 18. THE EARLY TEAM
- 19. START WITH FOUNDER CEO • Pick one as CEO: • King • Famous • Rich If you didn’t pick Rich, don’t seek funding You don’t have investors’ priorities
- 20. SCORING THE EARLY TEAM Founder experience First time 2nd 3 or more cos. 0 8 16 Operating experience or MD experience 12 8 Investor relationship Strangers Introduced Known – v. positive 0 4 12 Made money for an investor before For this investor before 12 20 Other team members Regulatory Clinical (CMO) Consultants known 8 8 4 Product Development Commercial/ Market Advisor(s) known to investors Board members known to investors 8 8 4 8/ea
- 21. • MD - idea from practice experience (8) • Does not know investors or angels (0) • Other team members not from medical device industry (0) • No well known advisors (0) • GOING TO HAVE A DIFFICULT TIME • Usual Solutions: • Raise money from friends & family (12) • Others: • Outside advisors or Board members (4-8) • Co-founders with industry experience (12) • Executive with idea from industry experience (12) • Knows investors (12) • Other team members with clinical (8) and regulatory (8) medical device industry experience (tot = 16) • Highly credible outside Board member (8) • TEAM WILL MAKE FINANCING MUCH EASIER HYPOTHETICAL FIRST TIME FOUNDERS
- 22. THE FUNDED TEAM
- 23. SCORING THE “A” TEAM Founder experience First time 2nd 3 or more cos. 0 8 16 Operating experience or MD experience 12 8 Investor relationship Strangers Introduced Known – v. positive 0 4 12 Made money for an investor before For this investor before 12 20 Other team members Regulatory Clinical (CMO) Consultants known 8 8 4 Product Development Commercial/ Market Advisors known to investors Board members known to investors 8 8 4 8 Series A
- 24. SCORING THE “B” TEAM Founder experience First time 2nd 3 or more cos. 0 8 16 Operating experience or MD experience 12 8 Investor relationship Strangers Introduced Known – v. positive 0 4 12 Made money for an investor before For this investor before 12 20 Other team members Regulatory Clinical (CMO) Consultants known Sales & Marketing Quality (QA) 8 8 4 8 8 Product Development Commercial/ Market Advisors known to investors Board members known to investors Manufacturing/ Supply Chain 8 8 4 8 8 Prior investor(s) Unknown 4 Highly credible/ well known 16 Series B
- 25. SCORING THE “C” TEAM Founder experience First time 2nd 3 or more cos. 0 8 16 Operating experience or MD experience 12 8 Investor relationship Strangers Introduced Known – v. positive 0 4 12 Made money for an investor before For this investor before 12 20 Other team members Regulatory Clinical (CMO) Consultants known Sales & Marketing Quality (QA) 8 8 4 8 8 Product Development Commercial/ Market Advisors known to investors Board members known to investors Manufacturing/ Supply Chain 8 8 4 8 8 Prior investor(s) Unknown 4 Highly credible/ well known 16 Series C… / IPO/ M&A
- 26. NORMS Getting the best performance from your team
- 27. HOW THE TEAM BEHAVES Job Skills and Experience SocialBehaviors Strong skills and experience + works well with others
- 28. GETTING YOUR INNOVATION TO THE MARKET Who do you need to get the job done? Can you work together synergistically? Can you inspire confidence in investors?
- 30. Performance Impact TeamEffectiveness Forming Storming Norming Performing Why do some teams never perform? How do some teams perform right away?
- 31. TOP 10 CHARACTERISTICS OF HIGH PERFORMANCE TEAMS 1. Participative leadership 2. Effective decision-making 3. Open and clear communication 4. Valued diversity 5. Mutual trust 6. Managing conflict 7. Clear goals 8. Defined roles and responsibilities 9. Coordinative relationship 10. Positive atmosphere 31
- 32. INTELLIGENCE OF GROUPS Best teams have… • Members who speak in roughly the same proportion • Members are skilled at intuiting how others felt based on their tone of voice, their expressions and other nonverbal cues (Woolley et al, Science 2010).
- 33. PSYCHOLOGICAL SAFETY • A group culture with a ‘‘shared belief held by members of a team that the team is safe for interpersonal risk-taking.’’ • Psychological safety is ‘‘a sense of confidence that the team will not embarrass, reject or punish someone for speaking up.’’ • ‘‘It describes a team climate characterized by interpersonal trust and mutual respect in which people are comfortable being themselves.’’ Amy Edmondson (Harvard Business School)
- 34. WHAT GOOGLE LEARNED FROM ITS QUEST TO BUILD THE PERFECT TEAM • Google’s data indicated that psychological safety, more than anything else, was critical to making a team work. • Other important behaviors: • making sure teams had clear goals and • creating a culture of dependability New York Times, 2/25/2016
- 35. “Google’s intense data collection and number crunching have led it to the same conclusions that good managers have always known. In the best teams, members listen to one another and show sensitivity to feelings and needs.” New York Times, 2/25/2016
- 36. HOW TO HIRE FOR TEAM BEHAVIOR? • Behavioral interviewing • Ask for stories about past challenges and how they approached them • Examples of past behavior as part of a management team • Present hypothetical questions about scenarios that involve team dynamics • References • Make sure reference checks review teamwork and managerial experiences, especially challenges when things did not go right • Include people who worked with candidate but they did not provide
- 37. TEAM TAKE-HOMES FOR ENTREPRENEUR • Experience matters • Network matters • Success matters Trust and respect matter most
- 38. MICHAEL J. WEICKERT 632 Sylvan Way Emerald Hills, CA 94062 Phone (650) 568-6125 Cell (650) 218-1840 mweickert@gmail.com www.witcreek.com