Have the right mindset
Still, there are strategies you can use to lead effectively. It starts with building the right team—and the star player is you. A big part of your company’s success will depend on whether you have (or can develop) the right mindset and aptitudes.
Fournier—a serial entrepreneur and investor who has launched several tech companies—says founders need four key attributes:
- vision
- resilience
- ambition
- empathy
Mona Minhas, Partner, Women in Tech Venture Fund and Thrive Venture Fund for Women, BDC Capital, adds grit to the list. “The most successful founders share the view that failure is just not an option,” she says. In fact, a 2023 BDC study found that grit and relationship skills were essential for entrepreneurs at all stages of growth.
Start with the right people
Next, surround yourself with the right talent. Minhas says a common mistake is to be dazzled by someone’s previous experience, such as a role with a big name in tech. But what matters more is whether they have a “hustle mentality” and are willing to learn almost anything.
“There’s no buffer on a small start-up team,” she says. “Every member has to become an expert in a range of areas.”
If you don’t have the funds to hire people at the earliest stages, get creative, suggests Fournier, with co-founders, board advisors and a network of fellow founders. Caveat: With multiple mentors, you may run into situations where your advisors don’t always agree. Consider their arguments, but make your own decisions.
Finally, once you have these people in place, let them do their jobs. The amount of time you should spend managing other people in your early-stage company, says Fournier, is zero.
“A successful start-up manages itself at this stage. Your job is to establish core values, direction and vision. Your colleagues should manage themselves toward achieving those. If you feel you have to spend a significant amount of time managing them, something is probably wrong.”
That said, make sure your team members understand their roles and responsibilities.
“Map those out early and clearly,” says Fournier. “In my experience, the start-ups that take the time to really think about this are usually the most successful.”
Pursue the right funding
Fournier and Minhas advise against using equity financing to meet day-to-day expenses, such as inventory-related expenses. You’re better off seeking a business loan for these needs. Use equity capital to fund growth, such as hiring new staff members, launching a new product or funding a marketing drive.
Borrowing can entail personal financial risk—and, of course, interest costs. But raising equity is generally more expensive in the long run, says Minhas, because you’re essentially giving up some ownership of your company. Choose carefully and investigate other sources of funding first, such as tax credits and grants.
If your calculations still indicate that you should try to raise equity, make sure investors are a good match. “A venture capitalist will write you a cheque, but they also need to add value,” says Minhas. “What are they bringing to the table? Do they have expertise in your sector? Do they have a network of other investors? Do they have access to talent you can use?”
