My tips to get startup investors interested

Q. How do you get a small fortune?

A. You invest a big fortune in startups.

Or so the joke goes. But with the global economy?more reliant on digital and technology ?development than ever, the joke is probably on anyone tempted to dismiss the startup industry. I’ve worked with – and been approached by – up and coming businesses throughout my career. What I really love about them is that mix of big ideas, passion, and energy to do something different. No risk of?boreout ?here. And so I’ve started to get?directly involved ?in helping the ones I think have real potential to get off the ground and grow.?

From my own experience, and that of other investors I speak with, there’s no shortage of innovation around. In fact, it’s quite the opposite. I mentioned the recent?boom in new business registrations ?in another post, which doesn’t look like it will be tailing off anytime soon. And with venture capital now flowing more freely again after being disrupted (like just about everything else) during 2020, it looks like it’s never been easier to launch or scale a tech business.

Or is it really? We’ve all seen the stats about it being 50/50 whether your startup will succeed or fail. Of those who make it, only about a third survive ten years or beyond, and?more than two-thirds ?never deliver a positive return to investors. There are no guarantees even if you’re a big name with heavy financial backing, as the likes of?WeWork ,?Quibi ?and Google’s?Loon ?– all $100m+ ventures – confirm. Ouch.

Meanwhile, for lots of other early stage businesses, it’s often a scramble to raise enough investment to do the basics, like hiring a team, developing product prototypes, or even renting working space. According to?Startup Genome , four in ten startups have at most three months of capital runway, meaning additional financial input is a must if they want to survive.

So how do increase your chances of success? Because with a more open playing field, there’s even greater competition for attention and funding. Potential investors are snowed under by introductions and pitches, which means it’s even more important to make an impact quickly and show that your business stands out.

As not everyone can go on?Shark Tank ?or?Dragons’ Den , even if they’re up for the potential public humiliation, here are my main tips for making your startup distinctive – for the right reasons.

1. A great CEO

Someone who understands not only what they can do but also, crucially, what they cannot do and where help is required. I have met many fantastic, engaging entrepreneur CEOs. However, sometimes the confidence they project reminds me of those scary base jumpers or free climbers…

2. A genuinely game-changing idea

These days, it’s not enough to be a little bit different; you either have to be closing a gap nobody else has managed to fill, or have a solution that is ten times faster, better, cheaper, stronger etc. than anything else that is out there.

3. Incredible understanding of and focus on the customer proposition

All startups will claim to have found the golden nugget in terms of their customer proposition. The reality is that often the nugget is the right colour, but needs further evolution and tweaking to get it right. Trial and error is key here. Having a good business plan is obviously important, but for me, a detailed customer business model is priority.

4. A convincing company narrative

Lots of the startups I meet have exciting products and business plans, but lack the narrative to create enough buzz and interest around them. Most investors will never admit that they dream of creating headlines, but the reality is that a good story drives interest. You also have to convince potential investors that your business is viable. And that means showing the numbers – sales, revenues, costs and profit – either actual or forecast. There’s no point being coy here, because to put money in, any financier is going to want to see that the business can scale and grow without significantly increasing expenditure.

5. A short, sharp elevator pitch

If your introduction or pitch is too long, and doesn’t grab attention quickly, it’s less likely to get a response. Think about how to succinctly outline what you intend to do: the problem you are tackling; the solution you are developing (you can leave out all the detailed product features at this stage); how your business model and team are structured; what stage you’re at; and where you are headed. 100+ page slide decks - well, it's a case of tl:dr (too long, didn't read) I’m afraid.

I wish all of you working on your own ventures good luck. And I can’t wait to hear about the next big innovation.

Photo credit:?Image by?Gerd Altmann ?from?Pixabay ?