Why Technical Founders Win

You have an amazing idea. But can you make it a reality?

That’s the question facing a lot of non-technical startup founders. 

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I often meet with entrepreneurs with amazing ideas. They want to raise capital to build their product.

But this isn’t how venture capital works.

A technical team can get to first base before a nontechnical team leaves the dugout. 

Investors rarely if ever want to give you money to create a product. They want to give you money to scale up an existing product that has some early traction.

That money could let you hire more engineers and salespeople. The additional staff could let you add features and find more customers.

But how are you supposed to get the product built in the first place? That’s why being a technical founder is so important.

An entrepreneur with coding skills can build it herself! 

Many great founders create a product in their spare time. As it gains momentum after launch, they can quit their job and focus on it 100%.

As they start to bring in customers, they’re in a strong position to raise capital. 

The non-technical team can’t build it themselves. They must hire costly engineers or pay a fortune to a development shop.

A technical team can get to first base before a nontechnical team leaves the dugout. 

No wonder Y Combinator Managing Director Michael Seibel looks for teams that are at least 50% technical.

Being able to build in house cheaply or free is especially important when capital is scarce. No one wants to fund a company that burns cash like crazy in today’s market.

What’s more, a technical team can quickly improve their product.

Let’s say the sign-in flow is difficult and users are giving up. If you have to contact a dev shop, who knows how long it will take to get fixed?

But if you know how to fix it yourself, you could have a better product today.

And those dev shops that seem so appealing can screw you over big time. Some refuse to give you the source code or take a huge slice of your company’s equity.

This makes it hard to ever leave the dev shop. That’s no accident. 

What’s more, giving an agency a huge slice of your cap table makes you unfundable by venture capitalists. There’s simply not enough equity left for the founders, employees and investors!

It’s hard to create a software company if you don’t know how to build software. Be sure you have at least one builder on your founding team.

And if you don’t have the skills to build your dream, go get them! 

It’s never been easier to learn to build software. There are numerous online courses available, many of them free.

Even if you never reach the Stanford Comp Sci level, being able to poke around in your product is a huge advantage for any leader! 

So let’s build skills, keep the burn down, and make something awesome!

How do you view technical vs. non-technical founders? Leave a comment at the bottom and let me know!

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Photo: Patrick Collison, CEO of Stripe. Collison’s strong technical background gave him an edge. “File:Patrick Collison.jpg” by JD Lasica is licensed under CC BY 2.0.


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