An Insider’s View - How Limited Partners Evaluate Teams
A Practical Guide For Building Great Teams
By Marlene Timberlake D’Adamo
October 2025
There is no more appropriate topic to write about than Team—the theme for this year’s publication. Team is one of the most important components in the venture capital space. A bad team will surely hinder, if not sink, most endeavors. A great team can not only deliver results, but grow a business beyond original expectations. For me, team is one of the most important assessments that LPs make. I would like to share the characteristics that I look for in a team.
For most of my career, I have operated at the intersection of human behavior and investment management. My roles in due diligence, investment operations, compliance, and risk management have sharpened my investment focus on people. It turns out, my focus is emblematic of the focus that other LPs zero in on when evaluating founding teams—and for good reason.
A lot of the decision to invest rests in the confidence that the LP has in the team, especially in the venture space. I believe that paying attention to the team component is one of the best things an LP can do to help mitigate investment risks. And, by the way, as a professional risk manager, I know that you can’t mitigate every risk—the best teams are those that mitigate what they can and build resilience against those they can’t. They also understand the value of building diversification as a type of hedge against the many things that can and will go wrong along the way.
So what do LPs look for in founding teams? Not surprising to me, they are the same characteristics that you want in people in whom you put a great deal of trust. These are potentially long-standing relationships with the possibility of dealing with and overcoming adversity along the way. LPs want founding teams that are trustworthy and honest, capable, resilient, and great stewards of capital—human, physical, and economic. Great teams communicate well—both with one another and with their LPs. They are also great operators and can execute to near precision. These elements are critical because the ability to execute is really what sets a great team apart.
LPs want to invest in category-changing ideas and the people who have the guts, grit, and determination to make it happen.
As it turns out, these characteristics hold for both venture capital teams and portfolio company teams. LPs invest in people who have compelling ideas—both at the venture capital firm level and at the portfolio company level. LPs want to invest in category-changing ideas and the people who have the guts, grit, and determination to make it happen. LPs who are interested in investing in game-changing products are looking for founders who can create great teams, scale quickly, and change the world. They are evaluating venture capitalists on the basis of not only the founders they invest in but also their own ability to grow a team that has the expertise to make it happen. A great team, in both contexts, is the thread that keeps everything moving together.
People are really at the heart of investment decisions. This is why venture capitalists spend so much time understanding the people who are at the center of portfolio investments and why venture capitalists can reinvest with a founding team over the course of several funds and companies. It is also why LPs can invest with the same venture capital team for many years. Team assessments are the foundation upon which these investment decisions are made. Understanding how LPs define great teams is paramount to building successful relationships. Great teams, both at the venture capital firm and at the portfolio company level, are critical to the success of the Limited Partners’ investments. Successful investments are what keep the wheels of capitalism spinning.