One of the most common questions investors ask during tech due diligence is: Do we have the right team in place? Are they the right people to lead the company through its next phase of growth? What do they need going forwards?
The challenge is that assessing a team’s competence is inherently subjective—unless it is grounded in evidence, context and of course time with the management team.
But I always go in with a postiive_open mind, as something went well for this team to get buyer/investor intention.
“Competence is highly dependent on context. The people at the top of any competitive field are not only well trained, they are also well suited to the task. And this is why, if you want to be truly great, selecting the right place to focus is crucial.” — James Clear, Atomic Habits
Why Context Matters in Team Competence
The success of a tech company is not just about having skilled individuals; it’s about how well the team aligns with the firm’s current and future needs.
Investors must look beyond resumes and track record and how they present in meetings to assess how the leadership team has adapted to challenges, how they make decisions, and whether they can scale with the company.
Assessing competence requires understanding:
- The firm’s performance – How has the company performed up to this point? Has the leadership effectively managed growth, crisis, or market shifts?
- Career development within the company – Has the founder nurtured the careers of key team members, or has leadership turnover been high?
- Decision-making influence – Do the leadership team and tech executives have a say in strategic decisions, or is the company overly reliant on a single founder?
- Readiness for scaling – Many firms have operated under lean conditions, keeping expenses low and minimising staff. As investment brings new expectations—hiring more staff, introducing structured reporting, and increasing governance—will the existing tech leadership adapt to this shift?
The Evidence-Based Approach to Assessing Team Readiness
Investors should focus on measurable indicators rather than gut feelings when assessing leadership teams. Key factors include:
- Track Record of Adaptability – Have they successfully navigated previous growth phases or pivots?
- Depth of Leadership – Does decision-making extend beyond the founder, ensuring resilience in case of leadership changes?
- Operational Maturity – Can the team handle increased oversight, reporting structures, and regulatory requirements?
- Culture and Retention – Is the company a place where talent thrives and grows, or are key individuals at risk of leaving?
Will the Team Evolve with the Firm?
Tech leadership that has operated in a lean, fast-moving environment may struggle with the transition to a more structured, scalable business model. Investors need to gauge whether:
- The CTO and technical leaders are comfortable with increased reporting and accountability.
- The company has a plan to bring in additional leadership where necessary.
- The team is open to mentoring, upskilling, or restructuring if required.
The Takeaway: Competence Is About More Than Skill
For investors, evaluating a leadership team isn’t just about assessing their past successes—it’s about understanding their ability to grow with the company.
And to be brutally honest, it is about picking up the historical dynamics. In SaaS, we’ve all heard of ‘tech debt’, so what about ‘team debt’?
Often, I have found that the tech leader has not been given full responsibility and will thrive if given the opportunity post-deal.
True competence is contextual, and the best teams can adapt to the next stage of the business. By focusing on evidence and company dynamics, investors can make more informed decisions about whether the current leadership is the right team for the future.
