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Thrive is set up by Funding London, a venture capital company bridging the finance gap for early stage businesses based in London. With over a decade’s experience in supporting the startups of London through a variety of funding vehicles, Funding London sensed a need to illuminate the ever-evolving scenario of London’s early stage businesses.

Thrive features interviews with and opinion from budding entrepreneurs, investors and industry experts. A mix of contributors from all areas of the industry is desired in order to spark genuine discussion about ongoing critical issues. While it showcases the effectiveness of successful ventures, it also encourages sharing lessons learned from missteps and unsuccessful projects.

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Trends · 1 March '21

What founders need to analyse and improve their leadership potential

Leadership. We know the word, we recognise it in action, but do we really understand the mechanics? When it comes to scaling start-ups, founders must understand where they sit on their development curve towards great leadership, if they are to fulfil their leadership potential, develop a high-performance team, attract investment and achieve exponential growth. Here’s what you need to know.

What is founder leadership?

Leadership is not simply being the head of the peloton or a wartime general; leadership is about how you lead. It’s about how you collaborate with your team. It’s about how you communicate and connect your purpose, vision and mission. It’s about how you foster company culture and translate growth strategy into growth trajectory.

Pre Series-A, leadership is also very different to those of developed companies. While a FTSE 100 CEO oversees an ocean liner, steadily manoeuvring to the conditions, a start-up founder is in charge of a kayak, facing ever-changing challenges at pace. As such, founder-leaders must learn and adapt at speed too, developing ahead of their company growth curve in order to successfully navigate the fast-flowing rapids.

What are VCs looking for?

A VC will certainly look at a founder’s leadership style before deciding to invest. That’s because founders are the genesis of their company: their individual strengths and blindspots are weaved into the company’s identity and have a huge impact on scaling both results and team.

Therefore, VCs look for indicators of leadership traits and behaviours to appraise scaling potential and the future health of leadership teams. For example, as AlbionVC’s Talent Director, I want to see accountability over blame, delegation over concentrated control, autonomy over micro-management. I want proof of healthy debate and feedback over defensiveness and stubbornness, a culture of inclusiveness and trust over one of favouritism and gossip, signs of emotional intelligence and empathy over outbreaks of emotional volatility and antagonism. I want to see founders who rise to new challenges, are resilient to set backs and harbour a deep desire to grow, evolve, learn and develop.

How to analyse your leadership potential

Knowing what leadership characteristics to have and knowing if you have them are two very different things. Regular self-analysis is therefore crucial to understanding your leadership potential and staying ahead of the development track. All start-up leaders on a scaling mission — no matter whether you lead from a place of pragmatic vision, cool-headed analytic decision-making, emotional connection, or creative instinct — should assess your own leadership team’s effectiveness, engagement and emotion. As a guide, ask yourself the following questions based on a founder’s six investable characteristics:

Credibility

  • Is my company’s purpose and vision clear? Could team members explain why what we do is important to their parents or children?
  • Is our ambition so audacious that it seems fantastical?
  • Am I maximising strategic links and leveraging networks to benefit the company and team members?

Commitment to results

  • Is there enough of a direct connection between the team’s current work and company direction?
  • Do we review, reflect and learn in equal ratio to plan, achieve and experience?
  • Can I genuinely measure how much each team is focusing on the right goals? Can I tell you what the next two sets of goals need to be?

Collaboration

  • Do I know why I trust each person on my team?
  • Does the team ‘fight’ with passion and vigour…and still unwind and laugh together?
  • Do team members regularly give each other credit when not in the room and proactively seek to advocate and support others’ development?
  • Is each individual ‘link’ in the leadership team increasing in strength as the team develops?

Change agility

  • Am I regularly making tough complex decisions with an element of risk? Do I feel the fear and then do it anyway?
  • Is our belief that we will succeed gaining momentum, amongst the team?

Contagious conviction

  • Do I hire aspirational talent, those who could genuinely work anywhere, and develop them? If not already in my team, am I cultivating a relationship with my world-class team picks?
  • Am I inspiring our organisation? Do people seek out my view and pass it on to others or claim it as their own? How often do I share powerful stories?

Coachability

  • How much do I receive genuine feedback? How much do I wonder if it’s fake?
  • In the last six months, can I name three examples of permanently changing my behaviour and three strategic areas of responsibility I’ve passed on to others?

How to improve your leadership potential

Of course, this checklist is just the start. Having a first row seat, to observe a founder as they develop their leadership style is one of the most rewarding privileges of my career. Pre-Series A, this style is like finding an uncut diamond. In my experience, an expert craftsman — in this case a leadership coach — plays an essential role in cultivating the finished product, to polish and perfect a style that dazzles. At AlbionVC, a coach is a must-have for our founders and we’ll help you find the perfect one.