Why venture capitalists always bet on the team

You often hear venture capitalists say that when they hear a pitch they are more interested in the team that will execute on the idea than in the idea itself. Meaning, that yes the business has to be a good one, however, investors are more interested in who is part of the team and how the team will work together in order to launch the business successfully. 

Why is it so important for venture capitalists to know the makeup of the team in order to invest in an idea? 

People often say: everyone has an idea in the back of their head but only some act on their ideas. And the ones that act on them have a chance of turning their ideas into an actual successful businesses. 

For an idea to translate into a successful business the following must happen:

1. The idea must be crystal clear, so that it can be communicated to investors.
2. You must have people that are willing and interested in working on the idea.
3. The people working on the idea must bring different skill sets to the table in order to execute the plan.
4. The people must be able to work well together to solve problems when challenges arise.
5. The people must be fully committed to the idea, and fully committed to making the business successful.

Since the people working on the idea are such an important component of the idea becoming a successful business, it is obvious why venture capitalists are most motivated by the people involved in the idea.

The same is true for any organization. For an organization to be successful the following must happen:

1. The goals must be crystal clear so that they can be communicated to the team.
2. The team members must be interested and motivated to work on the goals.
3. The team members must bring different skill sets to the table and must have proximity to the goals i.e. they must be the right people to work on the goals.
4. The team members must be able to work well together and problem solve when challenges arise.
5. The team members must be fully committed to the goals and fully committed to the success of the organization.

What should organizations do to make sure that they have the team that any venture capitalist would want to bet on?

1. Clearly communicate the organization's goals and ensure that team members can clearly communicate the goals to others.
2. Ensure that team members have the right skill sets to be successful and, when necessary, teach them new skill sets.
3. Allow team members to take risks and enable team members to learn on the job.
4. Create a universal code of language i.e. a language that every team member can speak and understand so that when challenges arise they can communicate and understand each other.
5. Help team members align their professional goals with the goals of the organization.