Do startups need more talent or more money?

I’ve heard it said that startups run out of time before they run out of money.

Equally, Seth Godin says that the purpose of startups is not to raise money but to be successful – which suggests that talent is more important than money (but both are needed, of course). What do you think?

Hence, are startups looking for business angels with talent or business angels with money? (Of course, they really want both – we know that, but what is the priority?)

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  • Startups require real entrepreneurs not money where the true entrepreneur will find resources without having to pay upfront cash for them. This provokes the real debate that ought to focus on those who support entrepreneurs. We need an entrepreneurial culture where services and support for entrepreneurs and their enterprise are provided for deferred benefit (consideration or shares) not immediate payment in cash.
    The true entrepreneur understands this, but too many self-styled ‘entrepreneurs’ seek funds and often expect to pay themselves before proving their business can make money.
    This is very similar to my 20-years as a turnaround executive saving companies when all too often the directors want further investment before proving that their enterprise is viable. In such circumstances entrepreneurial directors are essential to help turn around the failing business, not directors who expect their salary inspite of their contribution to the company’s financial circumstances.
  • Oleg Temple
    Tony, it is easy to be a critic, but nothing is ever so black and white. This is like saying I’d rather be lucky than good. Yes, in an ideal world this would work, i.e. action is equal and opposite to reaction and work in = profit out. However, depending on the particulars of the venture, it is often too hard to keep the balancing act of credits when frequently people don’t pay on time and various factors are impossible to ascertain ahead of time. What you suggest is that startups need to take way MORE risks – NO ONE would get anywhere without being lucky at some point, but you suggest they should be lucky ALL THE TIME until they succeed. Don’t believe in luck? Well, plan as you might, you can’t control all the factors that lead to success. Even if you keep your team small, don’t pay partners’ salaries, etc. things beyond your control can let you down at any time e.g. a delivery is late or a bank closes early due to an epidemic of the flu, flood or whatever. This is like saying you don’t need any insurance because you can plan your life and not get robbed or into an accident. Imagine how much you could save… You can but try to plan your every move, but you will inevitably fail. Startups are too fragile to bear the full brunt and risk of all round credit -if something should fail without a safety net of investment, the entire venture will collapse like a house of cards in a light breeze. Be as brilliant as you like, but without luck AND a reasonable investment you’re going nowhere – the proportion of the equation changes depending on how much of each attribute you possess. What’s the use of a brilliant, Earth-shattering idea if you can’t get it to the market? Also, remember, that inspiring others and keeping their passion going is much harder without financial backing especially when juggling all the other tasks of a startup in incubation. It is easy to be an “armchair quarterback” and criticize the game saying “if you’re so smart, why are you not rich?” (i.e. “if you’re good enough, you will ALWAYS find a way”.. sure. if you’re fast enough you can dodge a bullet. If you are strong enough you’ll never become ill. – these statements is also true and equally as useless and non-constructive, as no one is that fast, that healthy/strong or that good). Point is: generalization is never a good thing – the situation varies from project to project.
  • Oleg Temple
    I do not deny that “Power (money) is nothing without control (talent)”. However… the pendulum swings both ways! 😉 For a successful venture you need: idea/talent + money/leverage + LUCK. The proportion of the ingredients can vary, but with any of the catalysts missing the venture will never take off or crash immediately thereafter.
  • To Neil and to those who have posted, this is a great question, and as an entrepreneur entering my 3rd year of my business, which I have subsidized by keeping my day job, I would distinctly say that MONEY is needed befor talent. The stress of mounting bills blocks the creative flow. Each time I get a cash infusion, my company grows because I have time to work, relax with my family for a day/weekend, etc. That growth and clarity will attract others (TEAM), whereas desparation and anxiety has people walking away.

    I promise you – you connect me to the $450K my company needs, I will forgo my 1st year salary, and make a million dollar company. Any wagers?

    Thank you for replies and reminding me about the intersection between LUCK, Passion, and Perserverance is often called Success.

    Chris Trammell
    Founder & CEO
    Support Our Troops Ornaments &
    Custom Wreaths INTL.

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