If there’s one unassailable maxim in start up investing, it is that one invests in team first, everything else second. One of the major points of vetting a potential team is whether they’ve been through the start up cycle before, with more credence given to teams that have that experience. As we’ve been working on start up projects for the past couple of years, sometimes that held, and sometimes it didn’t.
And last week I read this in HBR: “New Research Suggests Start-Up Experience Doesn’t Help Social Entrepreneurs”. While it only applies to B-Corps, it bears some re-thinking of our deeply held assumptions:
If these early tabulations are any indication, there is no systematic evidence that prior founding experience is translating into superior performance for social entrepreneurs. Their ventures don’t have larger on-line followings, superior early-stage commercial performance, or greater social impact.
Are seed investors really leaving money on the table by clinging to old maxims that may not be true in the brave new start-up world?