Jeff Rosenthal, cofounder of CIV, highlights "breakup risk" among partners as a significant concern for investors, shaping their decisions. In a long-term perspective, Rosenthal emphasizes that evaluating partnership compatibility is vital, suggesting a unique approach where he and his cofounder communicated in written format to align their visions clearly. Supporting this sentiment, a 2016 survey shows that the management team ranks as a top factor in investment decisions. Understanding previous partner experiences is also recommended as a strategy to mitigate risks in prospective collaborations.
"Breakup risk between partners is a top concern for institutional investors. It's the thing we drill into the most," said Rosenthal.
"We like to think about partnerships on 10 to 20 year time horizons. So picking the right people to build with is likely the most important decision you will make in your career," Rosenthal emphasized.
"We wrote each other back and forth like pen pals to make sure that nothing was lost in translation," Rosenthal said, stressing the importance of written communication.
A survey revealed that 95% of venture firms consider the 'management/founding team' as an important factor in making investment decisions.
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