Investors Want to Believe in You: How to Become Investor-Ready
Actively seeking investment is notoriously hard as a startup. The time for investment comes at different points in everyone’s journey, however, it pays to be preparing yourself for this time from the get-go.
Many entrepreneurs are under the false belief that the only critical factor when finding investors, is the product. That’s what they care about, that’s what will be ‘on the shelves’, so surely, that’s what matters?
Of course, your product is important. Without a viable product, there is not ROI. However, assuming that they need to concentrate their efforts on this one area to secure investment is how many founders fail.
So, what else is critical to securing investment?
Believe it or not, the first thing an investor is going to look into and gauge is the founder, or founding team.
Are you driven to grow your founding team, or do you want it to be a one-man show?
A good founder recognises their weaknesses. Just as a technical founder won’t be as effective in market research, a non-technical founder is going to struggle when it comes to building the product and features. If you’re too small to grow just yet, how can you show an investor that you recognise where extra skills are needed? Working with freelancers and mentors is a great way to demonstrate accountability.
Do you have insight and tangible evidence that you’re providing a real solution to a real problem?
There is a reason why so many startups fail. Too many entrepreneurs make up problems in their head that do not need to be solved. They are too blinded by their world-changing product idea to conduct real, evidence-based research that will, eventually, contradict their belief. You need to show that you know exactly what your customers need, want, and think. Founders must recognise the hurdles they face on the way to growing their business and selling their product, having blinkers on is a huge red flag to potential investors.
Do you have skin in the game?
So you say you believe in your product idea — but how much so? Have you invested more than just your own time, or are you relying upon an investor to be the sole funding body? Your own investment in the startup is a demonstration to any investor that not only are you serious and driven, but you’re also prepared to risk your own money in the belief that it will pay off.
Do you have the practices in place to best position yourself for investment?
Some founders get months into their startup before realising that they’re missing the most basic practices which are paramount for their success. One of the most common issues is a lack of resources on what you need to secure investment — how can you know what investors are looking for in the run-up to finding an investor? One of the best ways to overcome this, no matter where you are in your startup journey, is by enrolling in a programme such as Kick-Off. Kick-Off is a journey for tech founders to validate their ideas, gain clarity on their core audience, develop connections and implement the processes needed to secure investment.