Kirsten Connell is Venture Partner at Octopus Ventures. She started her career at E-Synergy before spending five years at Seedcamp, then becoming Managing Director at the Cylon Accelerator based in London, which is focused on helping cybertech companies scale up. Outside of Octopus, Kirsten is an angel investor, board member and was previously involved in the Cherie Blair Foundation.
We highly recommend listening to the full conversation below:
But if you’re looking for some fast wisdom, here are the three main takeaways.
1. Truly disruptive businesses need time to educate the market.
Kirsten: “There are definitely some examples I’ve seen where the founders have everything you would want them to have, you know, the vision, the drive, but where the company ultimately hasn't succeeded. I think that then just comes down to the market not being ready. That whole educating the market piece is where it falls apart.
Ultimately, what can you learn from that? You can learn to build in a longer runway for companies who are really disrupting an industry where they have to educate the customer as to what the problem is. It’s actually a good sign if there's competition in that market, that's sometimes reassuring. If someone says, there's no competition, for me, that's always a huge red flag, there's always competition, even if the competition is to do nothing.”
2. A great deal of the decision making process on whether to invest in a startup comes down to founder ability.
Kirsten: "At the earliest stages, companies have little traction or data to really do a lot of analysis on. Of course, you can look at the size of the market and the price point and some financial metrics. But I think for companies at really early stages, for me, the execution risk, or opportunity always comes down to the founder’s ability.
Ultimately, people buy from people. Is a founder charismatic enough or compelling enough to build that; to share and articulate their vision to get the best early hires, to find customers, to raise investment? It's such an overall skill set that you need as a founder, that when you meet someone really special like that they do stand out from the pack. It's that sort of skill set that the founders are going to need to turn their companies into a success, hopefully. So for me, it just comes down to the founder’s ability to execute and then to bring that down one level further, there has to be a rapport with the founder."
3. Define what success looks like and make sure everyone is on the same page.
Kirsten: More often than not, when a startup does fail, I would say it typically comes down to the co founders’ relationships, and them either having slightly different visions as to where they want to take the company, or different aspirations. So that's where you often see a company failing because there's no clear direction internally as to where they're going. They're not sure if they want to raise five million or ten million. One may feel far more comfortable with raising one million and spending that one million within six months whereas the other one might want to be more conservative. One might not have a family or a mortgage and be able to work day and night and the other doesn’t have that freedom. So you know, there's so many different scenarios where the founding team can start off really strong together, but actually grow apart. And I would just say that naming names, that's probably the biggest reason why I've seen companies fail.
Have that really frank conversation together. What does success look like? Because again, these challenges can arise at any point, you might get an early acquisition request, one founder might be happy to walk away with, I don't know, let's say a million, but the other’s in it for the long game, and there’s no way they would ever sell out.
Have key milestones along the way to check, are you aligned? What does success for one founder look like? What does it look like for the other? Can you actually put down on paper a broad outline of your vision and the path that you want to follow? Sign an agreement between the co-founders. Even at the earliest stages, you know, the best practice is to go through that exercise. I think the earlier you do it, the better. If nothing else, the exercise of having those frank conversations is really enlightening for the founders.
Register to learn
more about our data,
fund and venture capital
5 min read
Is EIS the new best-in-class investment for retirement and pension planning?
Find out whether investing in EIS is a better option for retirement planning that traditional pensions.Read article
3 min read
Access EIS investments for May 2021
See which innovative new startups SyndicateRoom and its super angels backed in May 2021Read article
5 min read
What are the advantages of a diverse team in business?
Looking at research into the benefits of diversity for companies across innovation, profitability and reputation.Read article
3 min read
3 investing lessons from Angel Insights with Denzel Walters.
Super angel Denzel Walters discusses investing and underrepresented founders with SyndicateRoom Founder Tom Britton.Read article
3 min read
3 investing lessons from Angel Insights with Chris Mairs.
Expert investor Chris Mairs shares his insights and experience with SyndicateRoom Founder Tom Britton.Read article
4 min read
3 investing lessons from Angel Insights with Ros Singleton.
Gain expert insights into both investing in and founding startups from SyndicateRoom super angel and telecomms industry expert Ros SingletonRead article