Startup Know-How: How to present my team expansion to investors 🗣️

Picture this:

When pitching your startup, the person in front of you is really inspired by your storytelling, loves the company’s product, and sees great opportunity in the business model and market; now when finally getting to the last slide of the deck: “Why do we need your money?”, you speak a sentence and that’s it. 

The investor sees no clarity on how you are going to manage the investment. He questions whether it will make your startup successfully grow, or if he won’t see a return on its investment multiplied. You don’t have to go through every line of your financial projections’ expenses, but it is 100% better to give investors context before letting them assume your thoughts when placing those budgets. Most, or at least a big percentage, of the expenses usually go to paying payroll so you probably will like to be prepared to pitch your team expansion strategy.

Every investor knows and understands that to grow a business, founders need a great team behind them, they only want you to have a clear mind on how you’re going to grow it based on what you ACTUALLY need. In this article, I will give some tips on how to present your team expansion, the right way.

When presenting your team expansion to investors, it is important to clearly communicate the reasons for the expansion and how it aligns with your overall business strategy. As you have a strategy for your business, you should also have one for your team. 

Tip 1: Describe your plan together with the people you are going to need.

For example:

1. Product Roadmap Development:

• Development of Feature 1, 2, 3
• Improvement of User Experience Design to increase conversions
• Integration with A, B, and C

Team Members needed:

• Tech Lead (already covered by current CTO)
• 2 Front-end Developers (1 Senior, 1 Junior)
• 2 Back-end Developers (1 Senior, 1 Mid-level)
• UI/XI Designer (project-based / not fixed position)

2. Marketing/Sales Strategy XYZ

The more detailed, the better. This will not only give the investors comfort that you know what you’re doing, but will give you actual clarity on what you should do. I would even do a table with the roles, their skills, the seniority level, the modality of work (part-time, full-time, project-based, temporary position, fixed position), budget per position and if you want to get a little extra, the number of days expected to fulfill the main tasks.

You might say: “Okay, but I already placed what I need on the financials’ expenses.” Yeah, but they won’t understand why you’re spending most of their money on so many people, right? They will only see the numbers… give them the reason behind it. 

This will demonstrate to investors that you have carefully thought out the expansion and will be able to choose the right individuals to help you drive your company’s growth.

Tip 2: Show them that you care about their money.

“What are some millions to a billionaire?” Believe it or not, they wouldn’t be billionaires if they had spent their money stupidly, and they DO care about those millions, since they are expecting a great return on their investment, not doing charity for the good of yourself. Now, how can you show them that you’re moneywise? Do your homework. And by that, I mean learning how to reduce costs without sacrificing time and quality of the results. 

Show them a plan on how you are going to build your team: is it with a recruiting agency? Will you outsource the talent? Will you hire freelancers or partial workers? Are you going to do it by yourself or delegate it to another team member(s)? Or even better…

* A little extra pro tip here: International remote workers. 

It is well known that some countries have different economic situations than others. This enables a great opportunity for founders to hire inexpensive but top-notch talent. 

And I don’t mean outsourcing them with a BPO, nor incorporating 10 entities in different countries to “compliantly” hire your talent and going through the painful process of recruiting, learning about the local work laws, hiring a local accountant… I mean, hire them as contractors and simplify the work benefits management with an against invoice system to not deal with international providers yourself. “Where should I look for talent?” you might ask. Well, if you’re from the US, and Latin America is close to you, nearshoring might be the best choice for you to enable good collaboration and company culture.  Learn how the Jobbi.me tool streamlines access to LatAm Talent: from recruiting pre-screened talent, hiring them peer-to-peer as contractors, and automating payroll and benefits expenses of your whole team in only 1 transaction per month. 

You need money, obviously, why would you be pitching investors otherwise? 

Start by outlining the specific roles and responsibilities of the new team members, highlighting the experience and expertise that they bring to the table. 

Emphasize how the newly expanded team will help drive value and lead to greater success for your startup. Show investors how the expanded team will help execute your business plan and bring your vision to fruition. Providing concrete examples of how the new team members will contribute to the success of the company can help build credibility and trust with investors. Overall, presenting your team expansion to investors clearly and strategically will help showcase your business acumen and demonstrate your ability to make smart growth decisions.

Now, into the pitch.

Tip 3: Craft a compelling narrative to highlight the imperative needs of the new team members.

Learn how to effectively communicate the value of your team’s growth to potential investors. When presenting your team expansion to investors as a startup CEO, there are key steps you can take to ensure a successful pitch. First, clearly define how they will contribute to the overall success of the company (KPIs or expected results). It is important to show how the expansion of your team will fill a critical need within the company and enable future growth. If you have some evidence like case studies of similar strategy successes (other startups’ marketing strategies or product development for example) or user feedback, that would be great! Acknowledge that you and your current team members may not have the proper experience in the development of particular strategies, or the time enough to go as fast as you want. If things are getting broken (a great sign of product-market fit) you need to fix them fast to keep the growth flowing and to not let your current users down. Highlight the skills and experience of each new team member, emphasizing how their expertise will drive innovation and lead to increased profitability. 

* A little extra pro tip here: The importance of showcasing team diversity and experience. 

A diverse and experienced team can be a key selling point for investors.

Showcasing team diversity and experience is crucial for a variety of reasons. Firstly, a diverse team brings different perspectives, ideas, and approaches to problem-solving, leading to more innovative solutions and better outcomes. A company can demonstrate its commitment to inclusivity and equity, making it more attractive to potential employees and customers. Experience is also vital as it brings a wealth of knowledge and expertise to the table, enabling team members to navigate challenges more effectively and make informed decisions. 

Strategies for addressing potential concerns or challenges with team expansion

Common investor questions or hesitations regarding team growth, and a piece of practical advice on how to address these concerns:

• Concern: Incorporation of many people at once

Be sure to demonstrate a solid plan for onboarding and integrating the new team members, showing that you have a clear strategy for integrating them into the company culture and ensuring their success. 

• Concern: If hiring international remote workers, how will you manage the situation?

I mean, we are in post-Covid times, it’s okay to still have doubts about remote work. But, ensuring that the new team members have a clear understanding of their roles and responsibilities and setting clear communication channels can help mitigate potential challenges. Benefits setting is also important to make the distant worker feel valued/appreciated as a human being (not as an industrial machine), have a sense of belonging, and feel good about the company.

Investor questions or hesitations may include concerns about increased overhead costs, potential communication challenges, and maintaining the company culture. To address these concerns, it is important to have a clear growth strategy in place that outlines how the team expansion will align with the company’s overall goals and objectives. Demonstrating a track record of successful team expansion and providing data-driven evidence of the benefits of growth can also help alleviate investor hesitations. Ultimately, being transparent and open with investors about the potential challenges and how they will be addressed can help build trust and confidence in the team’s expansion plans.

* A little extra pro tip here: Address the current team members’ concerns.

One key strategy for addressing these concerns is to communicate openly and transparently with team members about the reasons for the expansion and how it will impact their roles and responsibilities. It is also important to involve team members in the decision-making process and seek their input on how best to navigate the expansion. Additionally, providing ongoing training and development opportunities for team members can help them adapt to changes and feel confident in their new roles. Finally, implementing regular team meetings and check-ins can ensure that any issues or concerns are addressed promptly and that everyone feels supported throughout the expansion process.

Real-life examples of successful team expansion pitches:

Share case studies or anecdotes from successful startups who effectively presented their team expansion to investors, highlighting key takeaways for readers looking to emulate their success.

One real-life example of a successful team expansion pitch is when Google pitched its search engine technology to investors in the late 1990s. The founders, Larry Page and Sergey Brin were able to clearly articulate the potential of their technology to revolutionize the way people search for information on the internet. Their pitch was so convincing that they secured funding from prominent investors like Kleiner Perkins and Sequoia Capital, which helped them grow their team and scale their business to become the tech giant we know today. 

Another example is when Airbnb pitched its idea of a platform for people to rent out their homes to travelers. The founders, Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, demonstrated the market demand for such a service and the potential for disrupting the hospitality industry. Through their pitch, they were able to attract investments from venture capital firms like Sequoia Capital and Greylock Partners, which enabled them to expand their team and grow their business into a multi-billion dollar company.

Tip 4: Leveraging your team expansion as a storytelling opportunity: Use your team expansion as a narrative device to showcase your startup’s growth trajectory, vision, and potential for success to investors.

Expanding your team can offer a unique opportunity to craft a compelling narrative about growth, innovation, and success. You can create a powerful story that resonates with stakeholders, investors, and customers by showcasing how your team has evolved and grown to meet new challenges and opportunities. You can also help build credibility and trust in your brand by highlighting the unique talents and skills each new team member brings, it can also help build credibility and trust in your brand. By leveraging your team expansion as a storytelling opportunity, you can create a narrative that inspires and engages others while demonstrating your commitment to building a strong, dynamic organization.

In conclusion, to present your team expansion plan to investors you should:

1. Show you have clarity in what you need.
2. Show why you need them, don’t just let the financials be interpreted by its reader. Explain how the team’s growth is aligned with your company’s growth strategies.
3. Explain how you are planning on recruiting and hiring the new team members
4. Be prepared to answer how you are going to make it work (onboarding process, company culture, and good collaboration)
5. Showcase proves that your new team members are going to change the game for your startup (Real-life examples of similar strategies or Feedback)

Ready, set, Pitch!

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