Teamwork can make the dream work, but lack of a solid team can be a startup's downfall. Pexels

The top two reasons for startup failure are no market need and running out of money, respectively. But the third reason for failure is not having the right team in place. Like market need, evaluating the management team is on virtually every venture capitalist's list of what they look for in their target investments and you need to get it right.

It is well known that new technologies have a limited window of opportunity to succeed and there are rarely second chances, whether choosing the right strategy, market, customers, partners, or raising rounds of financing. If a particular window is missed a chance to pivot may be available, but that typically requires a good, experienced and nimble team that is right for the overall opportunity.

Luck and timing are factors largely out of your control in a startup, but good-to-great teams are capable of dealing with fast changing conditions or lessons learned along the way.

There's not one "right team"

It is easy to say you need the right team, but the same team is not the right team for every startup. Any team needs some basic skills, and of course have the ability to deliver a solution to meet its customer's needs.

In addition to a diverse technical team, a startup needs different skill sets, including various business, professional and soft skills. It is obvious that software is different than medical devices, but within "software" there are a wide variety of skills needed from user interface to security and everything in between. Within medical devices, the variety ranges beyond technology from working with the FDA to medical reimbursement.

Similarities between standard business processes like customer billing, collections and capital asset management often do not vary much across some otherwise pretty diverse businesses. On top of that, the needs of the team change over time as startups progress from concept, to prototype development to launch and through growth phases.

Having experience with many different startups, I have had some recurring team members with whom I worked with again in my next venture. I have also experienced significant turnover of individuals and growth within individuals that where ready for a new challenge to keep them motivated. The right team varies from venture to venture.

Know your industry

One lesson is to have a few cornerstone roles in the organization. First learned in my consulting days, a talented team member might serve in a kind of cornerstone role where you know that job is "solved" and you will not have to worry about it. You then complement and build around him, adding more experience in a complementary role if the first individual has raw talent and enthusiasm. You would add young talent with plenty of room for growth around an experienced individual that has the ability to mentor those around them. No one way exists to create a good team, other than the best practice of mixing experience, talent and diversity in creative ways based on who based on availability.

However, patterns should be identified and assessed to complement customers when deep engagement is a key part of your model or with partners, distributors, channels, or other strategic parts of your extended business model. Some customers will accept less experienced staff; others will not. Some markets can be targeted successfully by inexperienced sales or customer service representatives, while others require field experience or at a minimum extensive targeted training.

Finding support

Beyond patterns, consider some other best practices that are appropriate for various markets; for example, the risk incurred by having an inexperienced FDA process lead in an FDA regulated product. Having little real experience with FDIC, SEC or similar relevant federal or state agencies creates a lot of risk in FinTech companies. In any startup, some areas can be easily contracted out while others need to be core internal strengths, even if developed over time.

That last word is key, the "time" component of startups. Early stages of a startup have parallels to my consulting days. It is a project that is managed like any other project, balancing the big three assets: resources, money and time. Any project is a balancing act of acquiring and managing those three assets, at least when you take out administrative details like payroll and the like. The next stage is more operational in nature, whether stabilizing operations or managing for growth, but it is common for a startup to have two or more CEOs between founding and exit as needs change.

Since VIC primarily is focused on university technology startups, the inventor is often a university researcher with decades of experience in the field of the invention. We follow a best practice of bringing in one of our senior team members as CEO, an experienced business savvy entrepreneur who complements the inventor well in those early technology de-risking phases.

We support those key team members with a shared service team to handle finance, accounting, legal, websites and more, outsourcing specific areas of expertise like intellectual property in a given technical area. We then fill out gaps with select hires. Over time, we work ourselves out of a job when the technology has progressed to a point that different skills are needed, such as handing off to a growth-stage CEO.

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James Y. Lancaster is the Texas branch manager for Arkansas-based VIC Technology Venture Development. Lancaster, who lives in College Station, oversees business there, in Dallas, and in Houston.

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Houston quantum energy chip startup emerges from stealth with $12M round

seed funding

Houston-based Casimir has emerged from stealth with a $12 million seed round to commercialize its quantum energy chip.

The round was led by Austin-based Scout Ventures. Lavrock Ventures, Cottonwood Technology, Capital Factory, American Deep Tech, and Tim Draper of Draper Associates also participated in the round. The oversubscribed round exceeded the company’s original $8 million target, according to a news release.

Casimir’s semiconductor chips can generate power from quantum vacuum fields without the need for batteries or charging. The company plans to commercialize its first-generation MicroSparc chip by 2028.

The MicroSparc chip measures 5 millimeters by 5 millimeters and is designed to produce 1.5 volts at 25 microamps, comparable to a small rechargeable battery, without degradation and no replacement cycle.

“Casimir represents exactly the kind of breakthrough dual-use technology Scout Ventures was built to back,” Brad Harrison, founder and managing partner at Scout Ventures, said in the release. “This is based on 100 years of science and we’re finally approaching a commercial product … We’re proud to lead this round and support Casimir’s journey from applied science to deployed technology.”

Casimir says it aims to scale its technology across the ”full power spectrum,” including large-scale energy systems that can power homes, commercial infrastructures and electric vehicles.

Casimir's scientific work has been supported by DARPA-funded nanofabrication research and its technology was incubated at the Limitless Space Institute (LSI). LSI is a nonprofit that works to innovate interstellar travel and was founded by Kam Ghaffarian. Technology investor and serial entrepreneur Ghaffarian has been behind companies like X-energy, Intuitive Machines, Axiom Space and Quantum Space.

Harold “Sonny” White, founder and CEO of Casimir, believes the technology can power devices for years without replacements.

“Millions of devices will operate for years without a battery ever needing to be replaced or recharged because we have engineered a customized Casimir cavity into hardware capable of producing persistent electrical power,” White added in the release. “I spent nearly two decades at NASA studying how we power humanity’s future. That work led me to the Casimir effect and the quantum vacuum, where new tools have allowed us to build on a century of scientific knowledge and bring abundant power to the world.”

Houston-based Fervo Energy bumps up IPO target to $1.82 billion

IPO update

Houston-based geothermal power company Fervo Energy is now eyeing an IPO that would raise $1.75 billion to $1.82 billion, up from the previous target of $1.33 billion.

In paperwork filed Monday, May 11 with the U.S. Securities and Exchange Commission, Fervo says it plans to sell 70 million shares of Class A common stock at $25 to $26 per share.

In addition, Fervo expects to grant underwriters 30-day options to buy up to 8.33 million additional shares of Class A common stock. This could raise nearly $200 million.

When it announced the IPO on May 4, Fervo aimed to sell 55.56 million shares at $21 to $24 per share, which would have raised $1.17 billion to $1.33 billion. The initial valuation target was $6.5 billion.

A date for the IPO hasn’t been scheduled. Fervo’s stock will be listed on Nasdaq under the ticker symbol FRVO.

Fervo, founded in 2017, has attracted about $1.5 billion in funding from investors such as Bill Gates-founded Breakthrough Energy Ventures, Google, Mitsubishi Heavy Industries, Devon Energy (which is moving its headquarters to Houston), Tesla co-founder JB Straubel, CalSTRS, Liberty Mutual Investments, AllianceBernstein, JPMorgan, Bank of America and Sumitomo Mitsui Trust Bank.

Fervo’s marquee project is Cape Station in Beaver County, Utah, the world’s largest EGS (enhanced geothermal system) project. The first phase will deliver 100 megawatts of baseload clean power, with the second phase adding another 400 megawatts. The site can accommodate 2 gigawatts of geothermal energy. Fervo holds more than 595,000 leased acres for potential expansion.

Cape Station has secured power purchase agreements for the entire 500-megawatt capacity. Customers include Houston-based Shell Energy North America and Southern California Edison.

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This article originally appeared on our sister site, EnergyCapitalHTX.com.