I'm about to open up a pre-seed funding round for an AR clothing label launching within Q2 2020.
In the process of creating the team, I'm wondering which professional figures shall I prioritise for maximising the company attractiveness with investors and strategic partners.
Does a stand-alone CFO keep equity shareholders/stakeholders concerns away? Is it crucial to have an in-house full stack developer?
From my perspective, the Year 1 dream team would be composed of 2 co-founders - a CEO & a COO, not overlapping much in their agenda - with outsourced marketing activities and technical operations until we're able to generate a positive cash flow from operations.
Please shed some light on this matter thanks!
Number one, your head of marketing. Because marketing strategy must come before product development, researching, developing, and validating your marketing strategy is an essential step in reducing risk before you present a plan to investors. Marketing strategy also drives product development and saves costly mistakes.
I also advise against assigning C-level titles. Startups run into problems with title inflation when they get to the next stage of growth. The first person to do a job is NOT automatically c-level. And, investors want to know that you understand what it takes to be c-level. Those titles mean something specific, and most "CEOs" aren't CEOs because they lack most of the skills required to actually be one.
Do not outsource your marketing. It will be 3x as expensive and the outcomes will not be driven by a stake in the outcome.
Here are the six fundamental business skills any business must have resources to cover: marketing, sales, organization, efficiency, people, and leadership. They're not the only skills, but they are the essential ones. No one person will ever master more than 2, so you will always need support whether that's from employees, contractors, or advisors.
Investors don't invest in ideas, they invest in plans. The more you can do to reduce risk, the more strength there is to your plan. And your marketing strategy should determine the direction of product development as well as define the edges of your audience, so they come first as the most essential INTERNAL part of your business.
In the history of companies, I cannot think of a single one that was successful when based on a triumvirate. From Caesar onward it is an unstable configuration, and my own experiment in a triumvirate was disastrous and cost me 7 years of my life. Figuring out how to sell your product is at least half of the challenge of your startup; America is a vast country with many regional differences, and although software products allow immediate national reach it is still a challenge to understand how the different blocks of people operate. I wouldn't dare advertise that you are going to launch in Q2 2020 unless you are well along. Software is among the most difficult areas to estimate completion time. At the 95% feature complete point, in terms of elapsed time, you might only be half way through the project. As for a standalone CFO, when your company is small you can outsource payroll to ADP, and hire a bookkeeper to do simple transactions until you actually need a finance person. They are very expensive and until you have a substantial business going, it isn't really justified.
Think small first. Is it out of the question to think you could build this buy yourself, acquire customers, and then hire once you've generated some income?
Dreaming big is awesome, but it's far more practical to go grassroots and see if this project has legs before investing a lot of time and resources into it.