“On any team, in any organization, all responsibility for success and failure rests with the leader. The leader must own everything in his or her world. There is no one else to blame. The leader must acknowledge mistakes and admit failures, take ownership of them, and develop a plan to win.” ― Jocko Willink, Extreme Ownership: How U.S. Navy SEALs Lead and Win
When investors are making a decision, there are many factors which are considered. The size of the opportunity, proof of concept, their own understanding of the industry, regulatory risks, and more. The list is truly vast. What it all boils down to, however, is the faith the investor has in the Management Team itself. This does not mean that they are looking for a team who has ran through all previous obstacles with flawless execution. The faith in the Management Team stems from the investor’s confidence in the Team’s willingness and ability to execute on the plan they are proposing. They are ENTRUSTING you, the Team, with a LOT of money and time after all, so you better make SURE you convince them you’re a winner.
Being a winner goes beyond bravado and chest beating with the promise of being the next Microsoft. Being a winner means you understand that even being armed with the best plan a team could possibly create, there will be setbacks, changes, and obstacles at almost every step of the way. A winner understands that within these setbacks, changes, and obstacles, there will be failures too. The real winners do not care. The real winners will say “NO” to finger pointing and accept full responsibility. They will ADAPT, and SURVIVE. THIS is what the investors are looking for. There are few things more unsettling than founders who claim to have a perfectly cut easy path to success in front of them. This conveys a few negatives, including grossly underestimating of how bumpy the road may be. The investors want to know that the founders will do whatever it takes (legally) to reach success, and failing to accept responsibility for past failures or even conceive of issues down the road is a catastrophic red flag. The investors need to know that founders will not abandon ship when the waves get choppy.
There are other places where investors will gain insight into the character of the Management Team. They ask probing questions to expose any weaknesses they want to find. Included in these questions will be the background of the Management Team and the company. This goes from separate past ventures to past issues with the company in question. The investors will not judge the Team so much by the outcomes of the situations, but how the Team views them. This will show the investors what each member’s mindset is and how the founders frame problems when they arise in business, as well as where the problems stem from.
When an investor listens to excuses from a founder making claims along the lines of “well it wasn’t our fault because the manufacturer couldn’t scale fast enough so we ran out of money and time”, all they hear is “I failed to see this as a potential issue, bet it all on one horse without contingencies, fallbacks, or proper research, and refuse to see how I could have done anything wrong for I am perfect”. This thought process provides a window into someone who is not mature enough to serve as a fiduciary or guardian of its shareholders. They will play hot potato with any responsibility or issues and pass it off to the easiest target in the room when issues INEVITABLY arise just as they do in EVERY SINGLE COMPANY.
So when meeting with investors, are you just going to package your answers in a way that SOUNDS good to them? Then save yourself the time and quit now. The reason every successful investor or business partner demands their teams take personal responsibility is because that is essential to success in business. It is the mindset, not the fluffy business-speak, that guides actions. Adopting this mindset forces you IMMEDIATELY set aside your ego and get to the root of a problem. From there, BAM, DONE, FIXED, NEXT. Now it’s over and no longer cannibalizing your company every. single. second.
Regardless of your position within a company, the mindset of blame and finger-pointing is an infectious pattern that will not only keep you from improving upon weaknesses and avoiding mistakes in the future, but it will bar you from becoming one of the world beaters in business who refuses the subscription to this ideology. Simply put, the time for middle school is over. If you want to enter the big leagues, then swallow your pride, act like an adult, and know that you are the Captain of your ship.
About the Author
Grant Anderson is a business development consultant and engineering student. Grant has covered all areas of development including market sizing, competitive analyses, extensive research, coordinating R&D, and public relations. Grant aspires to create his own technology commercialization firm focused on in-house R&D.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of RVF or UNLV. In addition, thoughts and opinions are subject to change and this article is intended to provide an opinion of the author at the time of writing this article. All data and information is for informational purposes only.