What's a founder’s mindset?

Beyond funding, founders’ personality and their interplay with their teams and investors guide the success of early stage ventures.

🙋 Personality: recent research about “The impact of founder personalities on startup success” identified six founder personality archetypes: leader, accomplisher, fighter, operator, engineer, developer. Startups led by diverse personality combinations, notably the 'Hipster, Hacker and Hustler' trio, have double the success rate. Key traits of successful founders include a love for variety, starting new things and higher activity levels (with a dash of immodesty 😉).

💃🕺 Psychometrics: startups are inherently risky. According to a 2022 HBR article, ~20% of new businesses fail within their first 2 years, 45% in the first 5 years, and 65% by year 10. These stats haven’t changed much since the 1990s. One factor lies directly with founders: 65% of startups fail due to founder conflict. To beat the odds, founders need to productively collaborate, especially under pressure, and compose teams with non-overlapping skills and complementary personalities.

➗ Diversity: cognitive diversity in startup teams extends beyond varied backgrounds - it is nurtured from diverse thought processes and ambitions. Startups with personality-diverse teams are more likely to succeed, a probability that increases when investor diversity is factored in. Aligning with investors is crucial, particularly when pivoting strategies or reconfiguring aspects like company size, GTM, product range, or business models.

In short: the normalization in funding and market conditions has been a wake-up call for many founders. It underscores the importance of adaptability as a personality trait, and alignment as a modus operandi with investors. In Fintech, this has led to pivots towards more predictable growth models like B2B and B2B2C. For founders, shifting team mindsets and securing support during transitions often requires new investors like venture buyout funds.

These funds specialize in overhauling mature businesses and addressing challenges like misallocated R&D, inadequate go-to-market strategies, or unsustainable operations. It is a different skill-set that is emerging between VC and PE: recapping the venture, underwriting its revenue streams, and rebalancing it in partnership with the founders' vision and motivations.