Mind the Startup Leadership Team Gap, Investors Say

Startup entrepreneurs know going it alone is seldom a good idea. But a senior “team” with only one kind of speciality – be it engineering or product development – can be equally as difficult.

Sonia Strimban, manager of venture operations at Toronto’s MaRS Discovery District – an accelerator, said one of her first interventions when a company joins is to make sure the right blend of leadership is at the top.

“You absolutely need a team,” Strimban says. “Nobody is going to give you money for an overdeveloped product without a business model.”

What an Unbalanced Team Looks Like

The pattern Strimban describes is a familiar one. A group of technical founders builds something impressive, keeps adding features, and only later asks who’s going to buy it and how. Nobody on the team has sold anything before, so the company ends up with a polished product and no reliable way to bring in revenue.

The reverse happens too. A founder with a strong sales or industry background can line up interested customers but has nobody who can build what they’ve promised. Either way, the gap usually shows up when the company tries to raise money, because investors are looking for a team that can both build the product and sell it.

Planning the Team for Each Stage

Strimban adds that it’s important to plan your leadership team for growth at different stages.

“At series A, typically, we see the most benefit in an executive in sales and marketing. If you’re not selling and you can’t accelerate growth, you’re pretty much toast. [You need] somebody who has revenue growth capability.”

This is particularly true now that VCs have pivoted away from startup unicorns in favor of the unstoppable cockroach.

Other investors concur about the risks inherent in single-person or unbalanced startups.

David Cohen, a co-founder and managing partner at Techstars Ventures, said in a 2007 blog post that he won’t rule out sole entrepreneurs, but holds them at a disadvantage. “Look for someone who compliments your skills,” Cohen said. “If you’re great at coding, find someone who’s great at selling or marketing.”

Cohen’s investment instincts proved astute as Techstars became an early investor in Uber just two years later.

Y Combinator co-founder Paul Graham made a similar argument in his October 2006 essay on the mistakes that kill startups, where “single founder” is the first item on the list. “Starting a startup is too hard for one person,” Graham wrote. “Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.”

Location is a Factor

Location can also often become a factor in finding the right senior team lineup.

“The U.S. definitely has many layers of experience of people in robust urban areas,” explains Gregory Melchior, Founder/CEO of startup 4D Virtual Space.

Some areas such as Greater Boston or Silicon Valley have a wider spread of skills at founder level. “There seems to be a correlation between the top universities – institutions have a ripple effect – that allows for a robust labour force,” Melchior adds.

However, finding co-leadership you can trust is now almost as easy as swiping right. Sites such as FounderDating aim to bridge the leadership gap by connecting leaders with different and complementary skills.

And true to their word, these platforms screen applicants so their base doesn’t get top-heavy with engineers.

Why It Still Matters

Strimban’s warning about products without a business model still holds up. A recent CB Insights study analyzed post-mortems and shutdown announcements from 431 venture-backed companies that shut down since 2023. “Ran out of capital” topped the list at 70%, but CB Insights called that the final cause of death rather than the root problem. The deeper causes it pointed to were poor product-market fit (43%), bad timing (29%) and unsustainable unit economics (19%).

Those are exactly the problems a sales and marketing leader is meant to catch early. Someone with “revenue growth capability,” in Strimban’s words, is the person on the team who keeps asking whether customers want the product, whether they’ll pay for it, and whether the numbers work. A team made up only of builders can go a long way before anyone asks those questions out loud.

MaRS still plays the role Strimban described. It calls itself Canada’s anchor innovation hub, offering startups and scale-ups commercialization support and connections to capital, customers and talent, along with advisors who have built and scaled companies themselves.

What It Means for Founders

If your founding team all shares one skill set, that’s worth fixing before you raise, not after. Make an honest list of what the company needs in the next 18 months, such as building, selling, marketing and managing money, and mark who covers each one. The empty spots are your hiring plan, or the profile of the co-founder you should be looking for.

It’s also worth thinking ahead. The team that gets a product built isn’t always the team that grows revenue, and investors at a Series A will want to see someone who can do the second job. Bringing in that experience early, whether as a co-founder, an executive or a strong advisor, makes the company easier to back.