GenuineVC David Beisel's Perspective on Digital Change

November 27, 2007

Venture investors often find comfort when a team of entrepreneurs beginning a startup have previously worked together. If the prior endeavor was a wild success, then the prevailing thinking is that it makes sense to back a team who should know the playbook for victory. But even when the last go-round was a mild success or even a tremendous failure, there is signal value in the fact that these individuals deliberately choose to work together another time.

Getting the gang back together, so to speak, should show above all else that each individual truly wants and needs all of the others to participate. All of them realize that a company isn’t built with one individual alone. It’s a strong indicator that every person brings a certain set of skills, experiences, and mindset to the company that are complementary to the others on the team – otherwise given a blank slate they would choose otherwise.

Moreover, when a team decides to launch a startup together for a second (or third or fourth…) time, it’s a clear demonstration that they have been able work with each other. Despite differences in opinion that might (read: should) arise when building a new company, they all respect each other enough to work together in a de novo situation. And so the risk for personality conflict amongst the team is lessened.

Yet there are still issues and questions that arise in this situation which are a result. Who is missing from the group from the last time? Why wasn’t s/he included? Who will fill their shoes? Should we fill their shoes? Also, the dynamic of having a team with a history together can bring baggage from a previous situation into it – there’s potential for leftover touchy-feely issues which weren’t resolved and could remerge or be exasperated this time around.

Having a prior history with a founding or management team can also negatively impact those newcomers to the company who weren’t part of the old team. The beauty of a startup is that it’s an organization starting fresh – unencumbered to move quickly and dynamically. But when there’s a common outside shared experience with a significant set of folks, then it can potentially create a divided culture of those who were there the last time around and those who are new, which hurts morale and likely performance. Additionally, it can make others reluctant to join because they’re missing the set of experiences or worry about integrating into the team. (People don’t join a startup to hear about “the good old days.”) And finally, a common set of experiences can lead people to the same conclusions and inhibit fresh ideas or novel approaches.

On the face, having people in a startup who have worked together in the past is positive sign. Brining the team back together again? Good. Now it’s important to remember to leave the old baggage behind and sincerely open the team to new members. Having the old crew gives you a leg up, but it’s only a start.

About Me

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