The Diverse Syndicate
Startups are generally not funded by just one investor. They are usually funded by a collection of investors; the angel syndicate, followed by the seed syndicate, followed by the VC syndicate.
This gives the founder the opportunity to gain insights and advice from a group of people versus just one.
I was sitting next to a VC last night who brought up the age old question – operator vs investor? She is a successful early stage investor who has never been an operator.
My answer to her question was “both.”
Yes it is fantastic to have people in the syndicate who have been or maybe still are operators. They will be able to help you with all sorts of management issues.
But it is equally important to have the investor mindset in your syndicate. Investors tend to be very attuned to financial issues like burn rate, when to raise, from whom, etc. They also understand market positioning, strategy, and similar stuff very well.
While you are at it building a diverse investor syndicate, try to get women, minorities, and other forms of diversity into your syndicate.
Treat building an investor syndicate like building a management team. What you want is a lot of differing strengths not a bunch of the same strengths.