Golden Rules for entering a start-up

A start-up is a unique and exciting venture. There are so many things to think of. The idea is just the first of many stages. 

I thought it would be helpful if I laid out the things we look for when we encounter an opportunity. Inversely, you can understand what you need to portray as an entrepreneur. 

Rule No 1: Passion and Drive

We are looking for people that go beyond drive. They are mission-orientated and focused on not just a business, but an idea. They have to be determined to work on that idea and make it succeed. But only passion really pushing drive into over drive and can get them through those really though times. Without this, the odds are stacked against them ever getting to the finish line. 

Rule No 2: Team 

A business is an idea, brought to life by people. We like to see a diverse team, able of tackling all aspects of the business. Too much focus on one area, eg. technology, without the ability to drive the message and raise money, doesn’t work well. You need people that understand technology, finances, people and the world. EQ and IQ have always been of equal importance at this level. 

Rule No 3: The Idea

The concept of just a good business, whilst important, the message of that business, so often can and should, be more than that. Ultimately is your idea adding value to the world? Is it something we feel proud to be behind? Does it have a social or environmental  message too? Can investors buy into that message. The world is, I would like to believe, moving to a place where wealth is not measured by numbers in a bank account, but by the number of lives we change.  

Rule No 4: Commitment and skin in the game

We like to see fund managers that manage their own money and entrepreneurs that have invested in their own ideas. 

Rule No 5: The finances

No one wants to invest in just an idea. We have to invest in a solid business. Any company without a cash-flow forecast is just an idea… it is NOT a business. I would not even entertain a company that didn’t understand its finances. That is just irresponsible and gambling. Know your idea, your vision and know your numbers. Always ask at every point, does the business generate profit, are we able to safe guard future jobs.

If we see a cash flow projection that is straight up for twenty years, clearly the management team hasn't understood the risk of different economic cycles. We had a difficult time in 2008, and we will have an equally difficult time, in 2020 & 2021. Economic cycles and contingency plans should be in every cash flow and every business plan.

Rule No 6: EQ & Communications skills 

The ability to communicate your idea is key. Strong 'Emotional Qualities' are vital.

Rule No 7: The right partnership 

It’s important to have the right partnership between investor and founder. The relationship is similar in many ways to a marriage. Expectations should be set at the outset and be realistic. Are you looking for more than just funding? Can that investor provide what you need? Do you need and Angel or a VC firm?

For example, in the FinTech space, Banko can bring capital, but also a huge amount of technical expertise. We are speaking to a number of payments firms in Africa and immediately can identify ways to reduce costs and add capital value through technology. This allows founders to continue their mission statement, with limited involvement but where everyone’s investment is enhanced through our technical expertise and network.