Every entrepreneur has to think about how to go about raising the angel investment needed to get their start-up business off the ground. Sometimes, however, they forget to look at the proposed deal from the point of view of the investor. What is it that the investor is looking for in order to make their decision?

When it comes to getting investment it’s the team that matters and not the idea. Why? Simple really:

• The team comes up with the idea
• The team does due diligence on the idea
• The team implements the idea
• The team markets the idea
• The team sells the idea
• The team changes the idea when assumptions are met
• The team comes up with new ideas
• The idea does nothing

Investors Have Money, Not Time

Take a professional Venture Capitalist as an example. They are typically actively involved with 5-10 companies and see a large number of new companies every year. Their time is necessarily split between all of these businesses. This means that they cannot hope to devote the same time or resources to any one idea as the management teams of each business can themselves. Put simply, they don’t have the time to work out whether or not an idea is good or not.

It Doesn’t Take Long To Assess People

It takes a lot of time and dedication to do the due diligence necessary to tell whether or not an idea is gold. On the other hand it’s quick and easy to get an idea of the merits of a particular management team. A few well chosen questions during a pitch can show how prepared they are. A couple of phone calls to past employers or colleagues can provide a good picture of their overall abilities.

What If The Idea Is Crap?

Even a great management team can’t make gold out of a crap idea, but this is why investors make sure that their businesses have a good management team: because good management teams don’t choose crap ideas.

This doesn’t mean that good management teams are never wrong or that the market will necessarily pan out the way that they expect. It does mean though that they have done the due diligence into their idea’s technical feasibility, marketing potential, associated costs, and so on, and all at a level of detail far greater than any investor can hope to match.

So, put the shoe on the other foot. If you were going to invest in a start-up company, which would you invest in? An idea that might even be a great idea? Or a team of people who give you the confidence that they will choose great ideas AND be able to handle it when things change?