To create a successful startup business, is not just about the idea itself, it is in the human nature to have quite a few ideas in mind at the same time and over a period. Some ideas are ready and matured in the age we live in; some ideas must wait a couple of years to become ripe. This is in the context of having a better chance of acquiring funds for your new company. So, how are one supposed to proceed? This is one of the questions that are asked regularly by entrepreneurs, usually with great concern.
In this article I have written about ten subjects that are important to have knowledge about, especially when you are an entrepreneur creating a new business. I use this list myself both as an entrepreneur and in my investment company; NorPerformance.
Perform a detailed analysis and be well prepared - To be successful with your idea it is important to stay connected to your lifelong dream. Then it is required that you have proper knowledge about your own company. It is important to be well prepared so that nobody can put you in a situation where you fail at something you are expected to have proper knowledge about. Prepare yourself for what kind of questions might be asked. By that I do not mean the simple questions, rather the questions of a complex and critical character.
To be able to come up with answers that fulfill those complex questions, you must research the investor-s you are meeting with. Look up their interviews and articles, try to understand what their interests are and which companies they have invested in previously. Nobody expects you to know everything at first, therefore it is alright to come up with an answer subsequently after the meeting. Do not fall for the temptation to say anything that is uncertain or not true at all. If you were to break that trust you will not be able to proceed, and it may even be a chance that your cooperation is over at that point.
Trust - Do not be afraid to describe the negative aspects of your idea. This involves building trust and it shows that you have thought through the positive and negative aspects that might occur. This also displays a great level of maturity. There is no company that have solved all their issues and challenges.
Previous events show that investors are more likely to be skeptical and uncertain when only the positive sides are demonstrated, than if the concerns about the idea is presented. You should also allow yourself to admit that there is no solution for a certain challenge at this point. Trust is the number one criteria, both with your employees and investors. This takes some time to form.
Always follow up on your meetings and your network - In my daily life I always follow simple principles like respecting the time, both mine and others. Following up on meetings, appointments and other promises. For instance, I will not hire anybody that within 24 hours does not follow up on his or her meetings. This could be answering questions that were asked during the meeting or simply being humble and thanking for the meeting itself.
This is especially true when meeting with an investor as well. If you want to get noticed and be able to arrange new meetings, you must be in a position where you are visible and beneficial to meet again.
Yes, time is valuable! Trust is quite significant to establish when you are in a meeting with the investor. To achieve that you will need time to let it be created and formed.
Therefore, it is important to have patience and trust when constructing a company, establishing your brand and having investors along the way.
Do not ask for money - Ask yourself, what is the finest way to separate oneself from another group of entrepreneurs when you are meeting an investor? Do not let questions about money be the first thing you ask for. Realize that the meeting is an opportunity to forge a relation over the course of the months or years to come. Build more trust by informing the investor of the next few steps for the company in the coming six months. It might be your team, clients, technology and so on.
Of course this means planning. When you need funds you can inquire the top three investors that have showed interest in your project and have helped you along the way. Personally, I have been inspired by Equinor’s methods when they are working with their new projects. They begin with the next phase right after the first milestone has been achieved. By using this method, they divide their projects in milestones. Using this logic you should place your question about funding in one of your milestones.
Encourage the investor to help - The best investor meetings are when you use 30 minutes on the company presentation first and then proceed to work on how you can create a magnificent company together. Investors want to “give back” using their experience and you should utilize that. Make a presentation and during that session present your greatest issues you have in your company and ask: “how would you proceed in solving this?” This will cultivate a relation between you and the investor because of the cooperation that might occur, and predicament will be of a mutual interest to solve, both for you and your investor.
Make your story known - This subject might be tough for some, but it is an important step. Where does your effort come from? Which events shaped you? What is your story? You can become personal on those topics because this creates relations and trust. Good relations between people are defined by what they have experienced in their past and which interest they have. At the same time another’s experience might be the key to your present or future problem, so it is important to be open and humble. You never know who or what may affect your relations or problems.
Thoroughly visualize what your product is - Investors are presented many ideas. These are people with companies that have a great analytical capacity. Regardless, they cannot understand all lines of business or technologies.
I strongly recommend visualizing the technology with a prototype you can demonstrate with. Do not be afraid to show something advanced in a manner that is understandable.
Customer satisfaction is your success - Nobody can argue with satisfied customers. A good suggestion is to use a simple feedback form to allow the customer to rate your product from one to six stars after each use. Do not present your company until you have reached a rating of minimum 4,5. Use these results and display them to your team and future investors.
Ascendable, secure and profitable - Are you minuscule in a well-established big market? Or are you massive in a new and small market? I always prefer the latter. Present yourself to have 80 per cent market share in a disruptive and small market with plenty of potential. Imagine how the bigger tech companies dominate the market shares within the period of which they sell only a few of their exclusive products. Present your progress for the line of business you are in, show that you are advancing and that you are becoming a fundamental part in that line of business, and when the market explodes you will still be a steady company to sell products etc.
The team - It is easy to claim to have a good team. In such cases the team should be presented to investors without any issues. There are many self-centered entrepreneurs that cannot create a team at all. Be the entrepreneur that pushes the other members in to the light and present them to the investor in such a sense that they perceive you as a leader and not a selfish boss that likes to hear his or her own voice. Demonstrate that your team is real people in a company that have and utilizes tools to analyze their own operation and makes choices based on data and so on.
If you are in the startup phase and are considering help, you are more than welcome to contact me and my team directly through LinkedIn, Facebook or Twitter for a more detailed conversation. Within the last 15 years we have provided advice.
You are welcome to share your opinions regarding this article.
by AFRIM KRASNIQI