What are the most common mistakes made when VCs build teams?

Imagine a VC firm, excited by a candidate's Ivy League background and impressive tech startup exits, quickly adds them to the team. However, they soon realize the new member struggles with adaptability and teamwork, crucial for the dynamic pace of venture capital. This hypothetical scenario underscores a common pitfall: prioritizing credentials over compatibility and potential. My experience in social impact and venture capital has taught me the value of digging deeper, assessing how well candidates align with our culture and mission, and their potential to grow and contribute to our collective success.

VCs often don't look beyond what they see on the resume leading to issues with the overall cultural fit. It is important to first understand the culture of the organization that you are trying to build. Has anyone on the team excelled in a similar culture in the past? How do you determine whether they are a good fit? Determine a set of key words that describe what you are looking for. Do you want an open culture or one of decision-making occurring only at the top? When has the team member acted in a capacity that would have put them in charge of driving this culture? Looking for details on creating culturally driven organizations show the team member has the experience to create it again.

Focusing too much on degrees, brands, and past job titles rather than actual skills, abilities, and fit. This can lead to less capable teams.

In the venture capital realm, a frequent misstep is prioritizing credentials over essential attributes like skills, team fit, and potential. Esteemed degrees and a notable track record, while impressive, don't guarantee an effective team member. VCs should delve deeper, evaluating a candidate's critical thinking, communication, collaboration, and quick learning abilities. It's crucial to consider their alignment with the firm's culture, vision, and values, as well as their ability to balance the team's existing strengths and weaknesses. Spread Shark Love #divineintervention #gabenfreude

Some common mistakes VCs make when building teams include overlooking diversity and inclusivity, neglecting to thoroughly assess cultural fit, prioritizing experience over potential, and failing to provide adequate support and resources for the team's success. Additionally, VCs may underestimate the importance of clear communication and defined roles within the team, leading to potential inefficiencies and conflicts. It's crucial for VCs to prioritize creating well-rounded, diverse, and collaborative teams to drive sustainable success in their portfolio companies.

In envisioning a VC firm that overlooks the importance of diversity, we see a team potentially missing out on groundbreaking opportunities. This hypothetical scenario highlights a common oversight: equating homogeneity with harmony. My journey in venture capital and social impact has reinforced the notion that diversity isn't just about representation—it's about embracing a wealth of experiences and viewpoints that can drive innovation and resilience. Building teams that mirror the diversity of the ecosystem we invest in not only enriches our perspectives but also broadens our reach and impact, ensuring we're equipped to identify and nurture the most promising ventures.

Diverse teams have been shown time and again to be higher performing than non-diverse teams. Driving from the desired culture of the company, look for team members that meet the same client facing traits as would be seen in a sales or customer service individual. Experienced professionals with backgrounds working with Boards also plays a critical role. Don't look past age when determining team composition. More experienced team members are better suited as mentors to less experienced team members creating a natural succession within the team. Women and minorities problem solve differently as well which rounds out the team dynamics creating a well performing team.

Failing to build diverse teams in terms of gender, ethnicity, age, and backgrounds. This can limit perspectives and innovation.

In the echelons of venture capital, an egregious misstep is the underestimation of diversity's profound impact. It's more than a moral edict; it's an unparalleled strategic lever. Diversity endows a team with a kaleidoscope of perspectives, unlocking novel insights and market penetration while circumventing the pitfalls of bias and myopia. It's the crucible in which creativity and innovation are forged, indispensable for the discernment and nurturing of elite startups. Venture capitalists must endeavor to sculpt teams that mirror the multifaceted tapestry of entrepreneurs, consumers, and societies they engage, encompassing a spectrum of gender, ethnicity, age, and experiential backgrounds. Spread Shark Love #divineintervention #gabenfreude

Picture a VC firm where the lead investor micromanages every decision, scrutinizing each move the team makes. This scenario, while hypothetical, is a common trap that stifles creativity and growth. My experience in social impact and venture capital has taught me that empowerment beats micromanagement every time. Granting team members the freedom to explore, make decisions, and even fail, fosters an environment of trust and innovation. It's about setting clear goals, providing support, and then stepping back to let the magic happen. This approach not only boosts morale but also drives superior performance, as each member feels genuinely invested in the firm's success.

Trust is a key trait all companies desire to achieve. Being able to set goals and objectives gives the team the chance to coalesce. Metrics based on outcomes versus specific actions builds trust between the team and VCs. To ensure success of a large objective, set out milestones with deliverables allowing the team to work successfully against the larger objective, but with a safety net that keeps the project on track. Provide feedback on work product is key to good communication, but remember to first say what is good about the deliverable before criticizing the deficiencies. This shows you trust the team to solve the objective the best way they know how, not just they way the VC did it in the past.

A cardinal blunder in VC team dynamics is the propensity for micromanagement. Such overbearing oversight erodes team autonomy, dampens motivation, and stifles developmental strides. It breeds an atmosphere rife with distrust, resentment, and apprehension, thereby impeding both performance and morale. Venture capitalists ought to eschew the micromanagement trap, instead entrusting their teams with decision-making autonomy, embracing risk-taking, and fostering a culture of learning from failures. Providing clear expectations, constructive feedback, and robust support, while cultivating an environment where ideas and challenges are shared openly, is paramount. Spread Shark Love #divineintervention #gabenfreude

In the venture capital theatre, a critical oversight is neglecting team development. This process is not a mere inaugural event, but a continuous journey necessitating persistent engagement and investment. Venture capitalists must not fall into the trap of believing team synergy and loyalty emerge spontaneously, without deliberate nurturing. It's imperative to cultivate a culture of ongoing learning, collaboration, and recognition, providing avenues for training, mentorship, and coaching. Regular assessments of the team's capabilities, identifying gaps and addressing emergent conflicts, are essential components of sustained team evolution. Spread Shark Love #divineintervention #gabenfreude

Imagine a VC firm that assembles a stellar team but then neglects their development, assuming the initial synergy will carry them forward. This hypothetical scenario spotlights a crucial oversight: the failure to nurture team dynamics and growth. My journey in social impact and venture capital has shown me that team development is an ongoing journey, vital for maintaining engagement, loyalty, and effectiveness. Creating a culture that values learning, collaboration, and recognition not only enhances team cohesion but also ensures the firm remains adaptable and innovative. Regularly investing in your team's growth is investing in your firm's future success.

Taking time to take the team out of the workplace gives them the chance to unwind, but think strategically about the direction of the company. Focusing on small group exercises to problem solve lateral problems gives the team the ability to grow together. Facilitation of the sessions keeps the team on track while providing an outsiders review of the team dynamics. During these off-sites, it is best to set time apart for the team and then the team with the VCs to share what the forward thrust will be. This then opens up conversations about what the VCs find are the strengths and weaknesses of the team. It is crucial to give recognition of successes before moving into criticisms. Give the team kudos whenever possible.

Ignoring team development: Not investing in training, mentorship, and growth opportunities for team members. This causes stagnation.

One big mistake VCs make when building teams is treating it like assembling robots instead of humans. When it's all about resumes and not about personalities, you're in trouble. Also, playing favorites or hiring just for skills without thinking about team dynamics – that's a recipe for disaster. It's like trying to put together a band where everyone plays lead guitar and no one wants to be on drums. Balance matters. Lastly, not giving enough thought to company culture – if it feels like a mismatched family, it's probably gonna fall apart sooner or later.

Culture drives team dynamics and putting the right skills together is not a simple task. Looking into what the team member looks at when addressing a sensitive workforce issue can highlight skills not shown on resumes alone. What is the emotional intelligence of the team member? Are they empathetic to the issue or do they take a hard line? Just as with diversity, soft skills on the team is another dynamic often overlooked. VCs are driven by returns, but they need to remember that all the employees have a life outside the company. Does the team member have the ability to see past goals and objectives to bring the emotional components into the corporate culture? Balance trust, empathy, and hard work to build high performance teams.

Viewing the team only through a business lens rather than also considering emotional intelligence and work-life balance. This harms culture and retention.

A quintessential misstep for VCs in team assembly is the omission of the human element. The focus often skews towards hard skills, overshadowing the vital soft skills and emotional intelligence. Remember, team members are not mere cogs in a machine; they are individuals with emotions, aspirations, and personal challenges. Venture capitalists must exhibit empathy, compassion, and respect, nurturing a safe and supportive atmosphere for their team's flourishing. Celebrating achievements, recognizing efforts, and rewarding contributions are key to acknowledging and valuing the human factor in team dynamics. Spread Shark Love #divineintervention #gabenfreude

The most common mistake after hiring on résumés is to consider only the board and management. Execution of the business plan is much broader than that. It includes manpower, equipment, premises budget, action plan etc... Delegating it all to good management is a solution but might not fit the concept investors have in mind or that was sold to them.

- Take your time to hire, not necessarily the best talents but the talents that fit the firm's current team, culture and value the most - Once the talent is hired, trust that person by providing enough autonomy and space to operate within the firm - Best way to manage the talents isn't micro-managing them due to the lack of trust but the right incentive systems and the right team culture. Finally come back full cycle to bullet one - take your time to find the right person to avoid the trust issues down the line

Ensuring proper onboarding and clear goals/incentives, facilitating collaboration through events/activities, and continuously evaluating and optimizing team dynamics.