What Investors Wish Startups Already Knew!
Getting investment for start ups or even scale ups is one of the “Holy Grails” of achievements in business. There is so much attached to this and the eventual success of any business.
But have we ever stopped to consider what an investor is looking for? What does a start up / scale up need to even play in this arena?
This week on our weekly Fireside Chat we interviewed Dean Dobson, ex Microsoft – turned entrepreneur and investor talk with us about his journey as a player on both sides of the investor journey – investor and investee. Watch The Interview Here.
Firstly A Few Tips From Dean’s Experience:
- Passion is essential in establishing any business – not just to attract the right investment but to also attract the right team. It is critical also in those times when things are not heading the way you’d like them to.
- Out of 12 investible start ups the law of averages says, eight will likely fail, two will break even and two will be a success. So bear in mind an investor has probably backed some losses before hearing your pitch.
- In making the jump to founder (in Dean’s case from corporate) you need to find someone who has jumped before to mentor you, aside from this get the right support – co founders etc. Be open to your short comings and bring those in early.
- You need to know that the journey is a marathon not a sprint. This is a long haul journey and you need to be prepared for the ups and downs the years ahead will deliver.
- Funds to matter – whilst you may not have all your funding lined up, knowing where you stand and having income contingency in the early days is extremely helpful.
- There are typically two funding journeys for a start up, both have their pros and cons.
- Bootstrapping – self funded / client funded – organic slower growth – owner stays in control.
- Fully funded – investor funded – rapid growth potential – owner loses some control
So We Asked Dean What Investors Are Looking For!
The business needs to have the right team that has some of the following attributes:
- A can do to get sales rolling
Know when the investor will get their money back.
- An investor will be asking “what is the likelihood of the start up being able to exit well?”
- There needs to be clear business outcomes for the investor
The offering needs to have competitive differentiation.
- An investor will be asking “what is the protective moat around your business?”
- Protections include barriers to entry, patents and trademarks, expertise…
If you are a the point of thinking about the next steps or engaging an investor why not come and chat with the team at Business in Bare Feet. You can join our SandTacks Club and talk with one of our 25 plus global mentors. Who knows you might even find your next investor.
Connect With SandTracks Mentoring Club
If you’re starting or scaling a business and not quite sure where to begin you probably want to conserve your precious resources, yet build momentum. You want to learn a lot, you need to learn a lot. Experienced entrepreneurs and business mentors are great people to guide you and SandTracks gives you access to over 25 global mentors who have been down the road – sometimes multiple times.
To connect SandTracks take the following steps:
- Join the FREE SandTracks communities through our company page on Linked IN and/or FaceBook
- Get into dialog with us through the above channels
- Take the next step and join the SandTracks Mentoring Club – Here. For as low as $97 per month you will get more intimate access to the SandTracks team and suite of mentors.
SandTracks is powered by Business In Bare Feet.