The website Quora recently asked a number of angel investors and venture capitalists why startups fail. Poor product? Competition? Lack of capital? The answer may surprise you.
First up was Jason M Lemkin, Managing Director of Founder-VC, Co-founder/CEO at EchoSign. He named the Team as the most common reason for failure. People who are great as individuals but unable to work together.
Paul Cohn, a hugely experienced venture capitalist, refined this to failure of the Board Of Directors. He said problems will always arise on the road to success but a good team and CEO will spot them and figure out ways round them. If there isn’t a good enough team or CEO, Cohn pointed out that it is ultimately the Board’s responsibility to recognise this and do something about it.
Anshu Sharma, investor/advisor in Nutanix, PubNub, Gnana many others, also pinpointed the importance of the team. He took the view that you can have a good team but it needs to be the right fit for the market.
Other experienced investors highlighted other issues that lead to failure but the dominating message was that it is crucial to ensure that the people in charge, however experienced and talented, can work together and run that particular business.
You can read the full story here.