What makes an investment promising, from the perspective of a venture capitalist? As any VC will tell you, it's not so much the idea being invested in; rather, it’s the team behind the idea, and most specifically, the founder.
A Smart Bet
VC investment is very much like gambling. Even having the best team and idea does not guarantee any level of success. That’s why many VCs spread their bets across a number of different companies; the way the math works out, you only need one outsized win to more than make up for all of your losses (or mediocre wins). But how do you optimize your chances of getting that outsized win? How do you know what to look for in a startup?
Well, there are many immeasurable factors that go into the success of a company, and to be honest, luck is probably one of the most important. Other factors, however, are much more concrete. And over the years, I’ve found that finding businesses with great founders significantly increases my odds of success.
My Tips For Finding the Right People to Build Your Next Great Idea
I have turned to every country and continent known for outsourcing talent. In Asia-China, Vietnam and India. In Latin America, Argentina and Colombia. Foreign outsourcing always seems like a great idea, right? Everyone says, “Oh, hire a bunch of smart people in another country for half the price!” But in reality, the challenges that working with offshore talent pose doesn’t make it quite that simple.
Throughout my career, several of my attempts to build an offshore development team ended up in failure. Despite having a similar level of education, when people come from different backgrounds there will inevitably be major cultural impediments. This may show up in terms of opposing work ethic or simply not understanding what conducting business in the #1 economy in the world entails. The language barrier is certainly one obstacle but the cultural challenges of working with foreigners is a completely different aspect that has to be considered.
