Founder-Mission Fit

The first thing investors are looking for before handing over capital

There are a lot of ways "fit" can be mixed and remixed when it comes to how investors evaluate whether to invest in a startup.

There’s product-market fit (the holy grail), where you can identify the output when your pour gasoline in the startup’s fire.

There’s founder-market fit (only really works in certain industries), where a founder already has previous operational experience in the market they are building a startup in. The downside risk here is when a founder with no previous knowledge is more readily able to discover disruptive strategies for change.

I recently read about Startup-market fit (only works in certain industries), where an idea is a better fit in a different locale. Perfect examples are consumer tech in Los Angeles, FinTech in Atlanta, HealthTech In Nashville, Bio-Startups near research-heavy universities, and Fashion in NYC. Lots of places where this works but it’s not a given.

Founder-mission fit is the one that appears to be consensus, however, it’s not as commonly written about. If the majority of investors only invest in founders who they believe can actually solve the problem their working on, it means that they put a high emphasis on founder-mission fit.

There’s a reason why some people backed Bird (founded by a former Uber employee) and why some backed Scoot (run ops by working with local government). For the former, they want someone who can push the envelope and grow another Uber. For the latter, investors believe an Uber can only happen once in a generation and now municipalities are on guard (see Santa Monica’s reaction to Bird launch).

As a founder of a SEDA (Startup EcosystemDevelopment Agency), we have to make sure we accept not only big idea into our program, but also look for founder-mission fit.

This is that secret sauce, the “it” factor that helps grease the wheel for sales, fundraising, and recruiting efforts. People know when they’ve met with a founder who fits their market. They simply make you believe that success in their endeavor is a foregone conclusion. This is important, because many times when you hear an investor speak on their turn-offs, one of the first is if the founder is not believable.

Translated to, “I don’t think this person can solve the problem they’re presenting better than other people I’ve met.” Investors don’t want second, not unless the total addressable market is so big that even second place will yield a healthy return.

In my discussions and research on institutional investors they know what a grind building a startup can be, and they want to be sure this founder can lead the idea to the promised land (an exit). They cannot get the sense that a founder will quit, that’s not founder-mission fit.

A founder who has a fit with their mission would never quit. Even if they ran out of money, they would find another way to begin working on solving this problem…just from another angle.

What happens when you meet someone with founder-mission fit? You find them operational savants. At this point, you need to make sure your founder is learning at the velocity required to out-execute the competition, but they don’t need much more than that. Just the capital and resources to handle their business.

This is something I constantly consider as I’m building out our ecosystem model. Founders will have to apply because we will basically be held to the same “hit rate” standard as VCs. If our bets don’t work, our business model fails.

What do you think? If you’re an investor, how do you measure founder-mission fit? How do you make sure that you’re betting on the right jockey in this race?

Delegation is a Founder case study on ego

What happens when you approach delegation from a place of humility?

I was listening to a podcast not long ago and came across the statement: “delegation is an act of ego”.

After thinking about it and digesting it in every way I can (yay for visits to the park), I realized how profoundly true it is. 

At its core, not being able to delegate is you saying that no one else can possibly do the job as well as you can. Think about that statement. 

You have someone on your team who’s actual job is to help lighten the load for you, and yet you can’t let them do their job because you believe that you’re the best at those tasks. 

It is very unlikely that you are delegating tasks that you are the most suited for…otherwise you wouldn’t be delegating it.

CEOs are the only ones who can be CEOs. They need to delegate the items so they are allowed to focus on their gift, to do the thing that no one can do, direct the company. 

What happens when you aren’t ready to give away the items that need delegation? You are hinder your organization. Not only is it shackled from a morale standpoint, but speed and productivity as well. The more levels that need your approval from you, the slower you become and the slower you grow.

IF you aren’t doing your most qualified work and someone who is qualified is twiddling their thumbs, the organization suffers. 

Simple as that. 

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