Good thought, Seth. And the devil is in the details. What makes a good manager for an early stage enterprise (powerful drive to push projects linearly) often makes a poor manager in a later-stage company charged with executing and commercializing (poor because he's impelled to drive everything himself, so can't delegate effectively and therefore cannot scale). This problem usually reflects a cognitive problem-solving style that doesn't change easily or speedily, or a personality makeup that will never change. Early-stage investors are frequently attracted to these qualities combined with charismatic social skills and domain knowledge and skill. Trouble is, the latter two areas are pliable and subject to learning or coaching, but the cognitive and personality dimensions are not. A close reading of the leader's intellectual capability and style, and his personality dynamics, can be extrapolated to a predict the trajectory of his viability over the long haul. If the longer-term projection is unfavorable, and all other factors are equal (e.g., good idea, good market, etc.), best to invest with the understanding with the leader that he has a predetermined shelf life as CEO, or not invest without creating a more suitable position for him (e.g., Executive Chairman and CTO) and recruiting his successor from jump start. A parallel problem-solving leader, who can orchestrate the complexity of a growing enterprise, can be encouraged to roll up his sleeves and dig into the details in the early stage of scarce resources, so long as his personality does not render him oblivious or averse to such activities. Moreover, not much can be done to avoid or improve upon unfavorable team dynamics if the leader and/or several reporting executives are hampered in their effectiveness to grow by cognitive or personality factors. Best to treat these two realities as “givens” that will not change, and invest developmental efforts in areas subject to change, e.g., social skills, insight, managerial capabilities, domain knowledge. Early diagnosis is the key. Bernie Daina, Organizational Psychologist

It seems to me that an unproven team with a great business model should still be taken very seriously. Of course, as you pointed out, if they are unproven and inexperienced, an unsuccessful execution will likely result no matter how great or innovative their business venture appears to be. I feel as though a CEO or founder that is willing to “forfeit the reigns” for the betterment of his someone worth holding onto no matter how inexperienced he may be.

- Scott from http://scottdig.com