VCs get tougher on startups: If you can’t get the right team, you don’t get funding

Investors are placing increasingly stringent conditions on funding for tech startups when it comes to recruitment of the right team.

As the Wall Street Journal’s Venture Wire reports, if investors believe that startups don’t have what they consider to be a full team, or don’t have a plan in place to hire the right specific people, funding may be less forthcoming than it was in the past.

Citing interviews with a range of VCs and angel investors, the report identifies a trend for investors to expect ‘rock star” developers – the top-flight engineers already being fought over by big names like Google and Facebook. Even early stage teams need to prove that they have the connections necessary to find the best talent when they need it.

Additional demands on startups when there’s already fierce competition for the best talent (how does a new company compete with Google’s salaries and benefits?) is sure to make life harder for founders. Still, with talk of a Silicon Valley bubble having been one of the enduring debates of 2011, investors being more careful with their money is a good thing and should help increase the overall quality of the startups that do get funding.