Investor's Preference of Management Teams vs. Lone Entrepreneurs

Small Business Startup
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Small Business Startup
Why would investors tend to favor a new business idea led by a management team over one headed by a lone entrepreneur?
Investors would tend to favor a new business idea led by a management team over one led by a lone entrepreneur because a management team consists of individuals with a blend of important supervisory responsibilities and nonsupervisory personnel who are essential to the normal functioning of the business.
Is this preference justified?
This preference is justified because investing in a lone entrepreneur means that the investor will have to rely solely on the entrepreneurs’ experience since the entrepreneur will not have any teammates or partners with sufficient expertise to back them up. Further, investing in a solo entrepreneur means that the workload will be mag...