Mentorship: Key to Startup Success
By Megan Maltby
If you have been following First Angel Network on social media, you will notice that we often share information regarding the types of things investors look for in young startups. There are a plethora of desirable traits often touted by angels and VC’s but among the seemingly vast array of suggestions, one requirement seems to persist. Yes, it helps if you have a unique product that aims to solve an identified customer problem. Yes, it’s great if you have an impressive business plan and have perfected your 60 second elevator pitch. Yes, of course it works in your favor if you have well-defined financial projections and have possibly even generated some traction. But above all, the message that seems to ring true is this: Investors are most concerned with your startup’s team and the talent that founders possess.
Understandably, not every startup is gifted with an expert team who happen to share experience in coding, sales and marketing, product development, and business management. There are a number of spots to be filled and, as with many startups, the team may not have the right talent from the get-go. Take a quick look around the Atlantic Canadian ecosystem and you will find many examples. There are young companies coming right out of the universities who simply do not have enough real-world experience to grow. There are also a number of startups founded by professors or scientists who lack the business knowledge required for their ideas to be commercialized. In larger companies, talent can be extracted with financial clout through hiring and consulting practices. However, startups often lack the financing to fill these gaps in expertise. This is the ultimate startup catch 22; startups require capital in order to grow the team, yet investors are reluctant to invest in startups that do not possess adequate management talent.
Mentorship presents a solution to the problem. Startups can tap into existing talent and expertise in the region by forming relationships with individuals who have “been there, done that.” Mentors usually provide assistance and guidance free of charge, making them the perfect partner for a young startup. There are a number of reasons for an entrepreneur to turn to mentoring in an effort to grow their business. Here’s a helpful breakdown of some mentorship benefits:
- Mentorship can complement formal education
As previously mentioned, many startups are borne out of university research in disciplines other than business/management. Professors and students from medical, engineering, computer science, or social sciences backgrounds may have extremely promising ideas and products but lack the business and financial acumen to bring these concepts to market. While an individual with business knowledge is important to have on board in the long run, in the early stages, startup founders can gain a great deal from a mentor figure. This mentor may even be able to connect you with prospects for CEO/CMO/COO/CFO (you get the point) roles in the future (see point #4).
- Relevant experience
Even if your startup founders do have backgrounds in business, they may lack the years of experience that a mentor can provide. For example, perhaps you find that your business has the financials in place and a great product prototype, but you need help getting this product to customers. You would probably benefit from an individual with direct experience in distribution and sales. Most business mentors have years of practice under their belt and have experienced many of the same hardships before. You may also lack experience starting a company/launching a venture. There are many successful entrepreneurs who have already jumped through the hoops and can lend a helpful hand.
- Honest second opinion
As with most everything in life, it is always beneficial to have a second set of eyes and ears (and brains) to mull over the issues facing your startup. As much as you want your venture to succeed, it is easy to get wrapped up in the everyday workings of your baby (the company) and forget to take a step back and reevaluate. While you may have a full founding team, investors, or even advisory board members, all of these individuals are invested in the company in some way. A mentor can provide a unique perspective as an outsider looking in, and give you the (sometimes brutally) honest feedback your startup needs.
- Enhanced Networking
Networking is an important aspect of any business’ development and becomes even more crucial in a startup environment. Founders should constantly be reaching out to key players in the region/industry in which they operate in order to form relationships and make gains for your business. This could be in the form of sales leads, customer acquisition, employee recruitment, and/or as a way to aid financing efforts. A mentor can provide access and exposure to a host of networking opportunities in order to elevate your business profile. Your mentor probably has years of experience and may already have contacts within the industry your firm is operating. Even if you are bursting with confidence and charisma, an introduction to a potential contact by a mutual party is always beneficial.
- Mentors often become investors
As you work with your mentor, he/she will become very knowledgeable about your startup’s operations, successes, and failures. Oftentimes, mentors will be impressed enough to take a chance on your company and actually provide financial capital. This will not only provide a bit of runway for your startup to continue growing, but could aid in raising additional startup capital as well, particularly if your mentor has a well-known profile or network in the angel/VC community.
- Support System
The life of a startup founder is far from glamorous. Despite the well-publicized successes and big exits of many fast growing ventures, the reality is that the majority of startups fail in the first few years of operation. Even if your startup manages to avoid this outcome, you will be faced with a number of challenges and stresses which can be overwhelming. It is important for entrepreneurs to have a support system in place when the going gets tough (because, rest assured, it will). Unless your family and friends have also launched a startup, they probably won’t be able to understand exactly what you’re going through. A mentor will, and can provide the relatable support you need.
After taking a look at the various challenges facing entrepreneurs, we have identified the need for strong mentorship in the startup ecosystem here in Atlantic Canada. First Angel Network provides a formal offering of mentorship drawing from our pool of high-level business executives and successful entrepreneurs. We accept applications from entrepreneurs in various stages of the startup lifecycle. Whether you are still at the concept stage and require aid getting your ideas developed, or you have already generated revenue and investment financing but need help with the next steps, First Angel Network would be happy to match you with an experienced mentor.
While we are drawing from our already existing network of business professionals, we are also looking externally for mentors. The benefits of a successful mentoring relationship are not one-sided. Mentors can gain a great deal from helping a less experienced mentee. They are able to give back to the community, gain access to pre-screened, high potential opportunities, and are exposed to increased networking opportunities. If you feel you have the business experience/skill set to offer and would like a chance to give back to the entrepreneurial community here in Atlantic Canada, please feel free to contact us.
If you have any questions or you would like to get involved please do not hesitate to contact us:
First Angel Network Association
1883 Upper Water Street
Collins Bank Building, Suite 202
Halifax, NS, B3J 1S9