My “Golden Syndicate” & 4 Free Passes to Medieval Times for Your Great Employee #5
Lately I’ve had a few people ask me who are the most valuable investors in our syndicate at Hyperpublic. My first answer, before I get into specifics tends to be as follows:
“Entrepreneurs tend to overestimate the impact that their early investors will have on day to day operations of their startups. Especially relative to the impact of their early hires.”
Here’s the secret truth of a seed round syndicate: once you close your round, you get a big pile of money and then it is almost 100% on you to make a success of your startup. That’s a bit of hyperbole, but you get the point.
Even as we grow at Hyperpublic from our initial two (Doug and I) to hopefully 5.5 (if we get there on someone we’ve been getting to know for the last month), the impact of this 5th team member will be 500% more important to the ultimate trajectory of our company than any single investor has been or will be to the ultimate outcome of HP. The reason: because investors are there to enhance your team’s internal efforts, but they can only amplify the momentum, good decisions, and execution that you are generating from within your core team.
This may sound strange for me to say, as I myself am an active seed investor at Lerer Ventures, but I thought it worth debunking the myth that a “golden syndicate” is capable of getting an early stage startup to the promised land. I think of our investors at Hyperpublic, at least at this point in our development, as extensions of our core team. My job as CEO is to channel their domain expertise and experience into actionable efforts within our core team, but without an amazing group of people putting their blood and sweat behind our investors’ domain expertise and guidance, our amazing syndicate would be valueless.
So this is all to say, nobody is going to build value for your startup like your team. Bring in the best investors as you can, but understand that 99% of the work is going to get done by full time employees. Success rests not on the shoulders of your syndicate, but squarely on the shoulders of your team.
P.S. I’ll write tomorrow about all the amazing things our investors have done to help grow Hyperpublic, and also maybe I’ll cover the value we’ve added to our portfolio companies at LV, but I don’t think there’s an experienced investor on earth who will place their own impact in the same stratosphere as that of the early teams that they’ve backed.
Jordan Cooper's Blog: startups, venture capital, etc... 
Hi Jordan,
I am new to your blog but I already like the way you write it.
I agree that the bulk of the work comes from the team and the core employees and that the inestors can only support their efforts from the wings, unless they decide to become involved at the next level.
Best wishes,
Peter
Peter Paluska
February 21, 2011