Gobi Partners’ Chibo Tang on the five warning signs he’s looking for when founders pitch
When your business’ future rides on a single pitch, that pitch needs to be nothing short of perfect.
And whether it be an excessive use of buzzwords, or the way you and your co-founder converse, one minor misstep can mean waving goodbye to funding.
Chibo Tang, a partner at investment firm Gobi Partners, talks to Gen.T about the most common mistakes founders make in their pitches—mistakes that have significantly cost them—and how you can avoid them.
Tang has been in VC for over a decade. As the head of the Hong Kong Gobi Partners office, he's led investments in companies including Airwallex, Welab, Aqumon and Sandbox VR. He also manages the Alibaba Hong Kong Entrepreneurs Fund, a nonprofit that provides funding, mentorship and training for young entrepreneurs. In 2019, he was recognised as a Global Top 25 Rising Star by the Global Corporate Venturing and Innovation Forum and was the Hong Kong Venture Capitalist of the Year in 2017.
Here are the five warning signs Tang says he's on the lookout for in any pitch.
Risky Founder Dynamics
When he’s listening to a pitch, Tang says the first thing he looks for is founder dynamics. “How did they meet each other? How long have they been working together? Do they cut each other off when the other is speaking? Essentially, what is their dynamic?”
“A good, strong founder team should be one that is well oiled. They should jive very well with each other, with not much conflict. Everyone should be clear and working towards one goal,” he says.
Founders who are related are a red flag for Tang. “It’s not a dealbreaker, but it would definitely add more pressure to the strength of the actual business and cause us to do more due diligence and give more attention to the actual management of the company and the division of labour.”
“I think out of all the investments that we’ve made, I don’t think there’s been one successful related founder team,” he says. “The difficulty is that even if the founders are jiving well in the immediate term, that doesn’t mean to say that 2-3 rounds later, when the company is much larger, that they will still jive well. The company is in a different place and they need different skill sets. If the CEO said, ‘Look I’m sorry but we need to bring in a real professional CFO from the outside,’ how would that go?”
“It’s not a straight up deal killer, but it’s definitely something we keep in mind.”
See also: 5 Tips For Finding The Right Co-Founder
Some founders tell me, ‘We’re going to make this super app and we’re going to solve everything that’s wrong with the world.’ And I’d say okay, well there’s the door