Rufus Scientific Ltd.

What makes a happy founding team?

There is a wealth of research about what makes an effective management team for a start-up company. Complementary skills, commercial focus, deep sector knowledge, effective networks all play their part, as does the ability to live on pizza and 3 hours sleep a night. But there is a phase before this, before the company is formed, funded, before it launches into the process of trying to get from A to Exit. That is the time of the Founding Partnership, when a group of people get together and decide they are going to start a new enterprise. They may not be sure exactly what they will be doing. They may have months, years of work ahead of them before they are ready to incorporate and seek funding. Does this Founding Partnership need all those skills?

I reviewed the skill set of 52 Founding Partnerships for UK biotech companies, and asked whether between them they had all of financial, commercial and technical skills. It turns out that nearly half the teams only had one skill set, but that made no difference as to whether they failed to get off the ground, were successful for a while but then flopped (say one seed round or one deal and then nothing - Short Term Success - STS), or managed to build a long-term success (LTS).

So what makes a functional, successful Founding Partnership? I explored this with my students at Cambridge, finding out what characteristics of a team made the team be happy to work together. Personality profile characteristics, skill sets, background, even nationality made little difference. What counted most was working style, specifically whether the team members were happy leaving everything to the last minute or whether they wanted work completed well before the deadline, something I call Deadline Brinkmanship (DB).

The message for all Founding Partnerships is for you to work together, commit in stages, and do not be afraid to say "It's not working" even before you incorporate.

The business proposition may be great (although we know how often people make money from start-ups, don't we?) But if you are going to spend the next five years working with someone who has a basically different style from you, it is not worth it.

And one last thing - there is no such thing as an "Entrepreneurial Personality". See this page for more on the "Entrepreneurial Personality" myth.