CHAPTER 5People 

Sean ran a survey for the accounting firm Ernst & Young a decade ago where he asked startup investors to weigh various elements used in their investment decision process. By far, the most important element was people, weighing in at over 40 percent. It’s not surprising to hear investors repeat lines like:

  • Bet on the jockey, not the horse.
  • An A team with a B idea beats a B team with an A idea.
  • People is to opportunity as location is to real estate.

Without people to create the business all you have is an idea. While most of the elements around a business are continuously changing, people are the hardest elements to change and are often the slowest to evolve. Remember that people are complicated.


While investors value serial entrepreneurs, founders who have created more than one company, they love serial management teams. A team of founders who have worked together is a treasure, and a team of founders who have previously built a successful startup is a great treasure. Regardless of experience, a highly functional team generally trumps a solo founder.

At Techstars, we’ve invested in almost 1,000 companies. While a few of them were solo-founder teams, the vast majority had between two and four founders. We believe that two to four founders is the right number and that at least half of them should be focused on the product. A founding team of four, with three businesspeople and one engineer, is a suboptimal configuration, as the engineer will spend most ...

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