If you’re thinking of joining a pre-funded startup as an employee, or you’re considering investing in a startup (and you’re not a professional investor), look out for these early-warning signs that forebode failure.
1. The founder is unemployable.
If your founder has jumped from one job to another over the years, it’s quite possible that they just cannot hold a job. Degrees from prestigious schools can help people land jobs, but incompetence or some deep personal weaknesses prevent them from holding onto those jobs.
2. The founder cannot assemble a team.
Assembling a team is the founder’s first test. Founders must be able to sell their vision to others. They should have a line of people willing to work for them in their new startup. If this person cannot muster support from former colleagues, classmates, friends or family, they’re doomed.
3. There’s little visible progress.
If, after two or three months of talking to the founder, there’s little change in the business plan, the website, the team, or the vision, then the founder is moving too slow. Early days for startups involve dramatic levels of change as the founder experiments, researches and learns.
If you’ve been asked to join forces with a founder exhibiting these three signs, politely decline.