By Jennifer Atala, CrossComm – Contributor, WRAL Techwire | July 8, 2019

Editor;s note: Jennifer D. Atala is the Director of Business Development for CrossComm, a leading web, mobile and immersive app development studio based in Durham, NC; and leads Atala Consulting, where she advises entrepreneurship ecosystem builders globally and gives speaking engagements. She can be reached at

DURHAM – Picture this. You are in a conversation with an early-stage startup founder that you are considering investing resources in, and you hear one of the following lines:

“Why do I want to enter that market? Because I know they need my software. No, I didn’t do any market research. This is my expertise – I just know. No one has anything like what I’m building.”

“Why won’t anyone invest in us? We’re changing the world! Something is wrong with the investors – they are all talk, and no action. They don’t want to take risks.”

Does this sound familiar? Whether you’re a potential investor, strategic partner, consultant, or customer – statements like these are red flags. I have advised governments, impact investors, accelerators and entrepreneurs across the Middle East, Europe and the US throughout my career, and have heard these exact statements from early-stage startup founders around the world. Whether you’re in Tel Aviv, Berlin, or Toronto, founders are founders. First-time founders have it especially rough – they could have an incredible idea, but might have little business acumen or lack a realistic pulse on the market they want to enter. Similarly, first-time startup advisors and investors have some lessons to learn. I’ve definitely learned some of mine the hard way.

So, before you dive into investing your limited time and hard-earned money into an early-stage startup, here are my top three considerations:


If an early-stage founder has some money behind their idea, whether it’s bootstrapped from family and friends or an initial investment from an angel, they likely have an intriguing product and/or service and know how to talk about it. They might overflow with a level of confidence that is hard to resist. But no matter what they tell you about their financial security and their runway, don’t trust it until you’ve assessed the financials yourself (or have had someone else do it if you don’t feel comfortable). The validation of some initial funding or investment is attractive, but it doesn’t mean it will be used wisely or for the right purposes. If you’re coming on as an advisor or follow-on investor, it’s important to understand the budget, overhead costs, planned expenses, and pipeline early on. Ask hard questions about perceived revenue generation projections, staff costs, and marketing budget. Make your own judgements about how realistic the answers are that you’re getting, and ask what their Plan B is if revenue or further investment doesn’t come when expected – and what will get cut if that happens.


I’ve learned that getting references from the founder’s current investors – even if they are individuals you have worked with before – is not enough. Get an understanding of the role the founder is playing, and how they plan on filling key, early-stage roles that will be lacking. You’re looking for character, roles, and capability.

I heard from a fellow startup investor and advisor once that you work for yourself either because you choose to or because you are not cut out to work for someone else – which I think is true. Does the founder have the experience needed to build a team and manage it? Are they unreasonable, untrustworthy, or abusive? The key word here is humility. If one of your founders doesn’t possess this quality, they won’t succeed, and you will likely reach a conflict. Examples of a lack of humility include not being able to admit when you’re wrong; not being able to understand the bigger picture or pivot if needed, when needed; shifting blame when things don’t go the way they expected; not valuing the services being offered or not recognizing loyalty and expertise when it’s in front of you.

The main reason I recently chose to leave working for myself full-time and join an innovative, growing tech company is because the Durham, North Carolina based Founder/CEO I am working with – Don Shin of CrossComm – intelligently leads from a place of humility and kindness with an impact mindset.

I learned from one of my clients, a global startup accelerator and business builder for whom I currently serve as a trainer, GriffinWorx, that there are three roles a startup needs filled in the early stage, none of which have to be full-time or paid: Ideator, Marketer, and Finance person. And those should not be the same person. Once you figure out if these roles are covered, you have to assess capability – you can say you’re a great marketer all you want, but when the rubber hits the road, can you really deliver? Is everyone pulling their weight? Is the founder pushing for business development before their idea has been validated? Are they making 6-figure projections based on a one-off, small-ticket item sale within their personal network? Are they pushing marketing before they have an MVP? Dig deep.


Early-stage financial investment can be a validator – or a crutch. When an angel, accelerator, or firm chooses to make an early-stage investment – regardless of equity stake – this can feel good. It shows that other people with perceived expertise have evaluated the founders, business idea, and market enough to believe that these founders have a shot at success. It validates the concept for you to come in as an advisor or investor. But it can also be a crutch.

When early-stage founders take investment, the stakes get a lot higher. Everything becomes urgent, to the point of making it a lot easier to make bad decisions, rush into decisions, cause burnout or mission creep of responsibilities for staff. Sean Griffin, a serial entrepreneur and the founder of GriffinWorx, taught me an important lesson as we built entrepreneurship ecosystems around the world: Focus on revenue – not on investment. The more money a business makes the more fundable they become. Aside from coming up with hacks by bootstrapping and tapping into communal resources like maker labs and industrial zone perks, you need to test if someone will pay for your idea. I’ve participated in initial Extreme Build-a-Business Weekends – the kick-off event of the GriffinWorx Startup Cup – where our trained mentors asked startups to just leave – go to the street and sell their idea – and it worked. You’ll know if there’s an appetite for your product or service if you walk up to someone and ask them to give you money out of their wallet then and there.

If you’re an investor, don’t rush to invest in an idea you like – maybe that’s not what the startup needs. Maybe it’s pro-bono legal advisory to get registered or accounting support from within your professional network. Maybe it’s help testing their customer profile. There are lots of ways to help a startup or founder you like that better benefit the startup and its founders before an equity-investment stake. And maybe – just maybe – they shouldn’t be moving forward as a for-profit, investment-taking entity at all.


Working with startups is exciting. The energy behind a founder that drives him or her to dedicate all their free time to build and execute an idea is intoxicating. Innovative and creative ideas – especially the impact-driven ones – can have the potential, at least on face-value, to change the way the world works and even save lives. Being a part of that as an advisor or investor is wonderful. But behind each idea is a human being, or two or three, with strengths and weaknesses. These top 3 considerations are crucial to help you determine if an idea might succeed, to see if it truly is solving a pain point in an industry or in the world, and if someone will really pay for it.

So before you jump in, I hope you will consider the lessons I’ve learned over more than a decade of working with MSMEs and startups around the world. Finally, as an advisor or investor, remember your own value, and the myriad ways you can support ideas and founders you care about.