Unless you’ve been living under a rock, you’ve probably heard about the entrepreneur who famously got a $2 million investment after showing a presentation about nothing. Now, the same entrepreneur, Itay Adam, has created a new model for investors that builds on the ideas he used to secure funding. The gist of it is to invest in a team — not a product.
It’s a well-known practice that if you invest in a talented team and give them the freedom to create, they will be able to test, experiment and build something successful. However, Adam’s theory leverages another concept. By investing in a team and giving them the freedom to experiment with multiple concepts for a company, instead of focusing on just one, you can hedge your bets and spread the risk beyond one make-or-break idea.
Adam calls this model the StartLab.
The StartLab model focuses on angels and VCs investing in key teams of creative entrepreneurs that have the capability to produce multiple ideas for a company. To understand the benefits of investing in people over companies, you need to first understand the core components of the StartLab model:
Test to Cater vs. Test to Build: “Test to Cater” teams will take multiple ideas and test them out before building a team to support one winning idea. “Test to Build” will produce a more detailed working pilot of an idea and look to grow it into a successful company.
The Team: There are three core members of a StartLab: a full stack developer capable of building products out across platforms, a designer to create and put all the pieces together, and a director to guide and lead the entire project.
Source: https://www.forbes.com/sites/ilyapozin/2015/10/08/4-reasons-to-invest-in-people-not-companies/#4fb8dfbc47cb