Understanding a no – and avoid feeling like a loser

23 days ago

Running a startup is a never ending search for resources. Under these circumstances, it can be tough to get the answer no from startup studios or investors… Let us give a broader perspective, and you will feel less like a loser.

Understanding a no – and avoid feeling like a loser

The pitch situation can be nervous and many thoughts are running through the founder's head – am I explaining the potential clearly enough, highlighting the right things, looking confident? You don’t have to worry. There will be questions about the missing parts, but far more important – there is rarely one sole reason to a yes or a no. We add several pieces to the bigger picture when evaluating your chances to succeed. Unfortunately, there are often more reasons to say no than yes… So, what can be the reason for a no? Let’s check out some of them. 

The lack of “startup talent” – blessed by many others

Having the right attitude is not only about working hard and being good at socializing to broaden the business network, it’s also about the capability to navigate in an environment where everything is in progress – and you are in the lead of that process. Without doubt it’s a demanding task. With a co-founder or investor on board, there will be high expectations, a lot more questions and tough talks. Sometimes we meet great personalities with interesting ideas, but we just can’t see those persons succeed with a startup business. And if the founder isn’t right, the business isn’t right for us.

The future ahead of you...

The talent takes us to the next reason – the future ahead. We know what is coming around the corner, and we must ask ourselves if you and your team are equipped to handle it. In the beginning you need to be a generalist beside your specialization so that you can take “good-enough” decisions within business strategy, finance, sales, marketing, recruitment and so on to push the business forward. We also need to be sure of your capacity to handle sudden threatening scenarios such as technology platforms that crash, key persons who leave the team, wrongly calculated runways, partners that become enemies, media pressure and unexpected new regulations that challenge further growth. Do we sound negative? No, we are only realistic. Of course, we want the best possible conditions for our commitment.

Uncertainty regarding scalability and speed

Every startup studio and investor looks for scalability. What do we mean by that? All companies can scale, can’t they? Even a small bakery can grow by opening new bakeries? Scalability for us is a business that can achieve high or huge valuations in a relatively short time, which means that they must have a business model that can support rapid growth. Not be filled with hurdles that can hinder increased productivity. So to the inevitable question: Is it only SaaS companies that can scale fast? No, certainly not, it’s the business model that is decisive for scalability.

Not centered around disruptive innovations

To be highly interesting, your startup also needs to be centered around some of the biggest innovations of our time, for example artificial intelligence, robotics or block chain technology, or some of the biggest consumer trends, for example the shift from public to private ways of living or the increased demand for flexibility. Today it’s not enough to say that your product or service “digitizes” a sector or makes a business more sustainable. We want to see how those big innovations are used in totally new ways or how products and services ride on emerging trends. Startup studios and investors are not interested in best practice or proven methods; they want to be surprised by your smartness to discover new market niches.

Doesn’t match the investment strategy – can still be a good idea

Finally, all startup studios, VC firms and individual investors have their unique ideas of what kind of startups they are interested in e.i. their investment strategy. Criteria can be about technologies, sectors, trends, geographic areas, genus, startup phases etc. Sometimes it’s neither about talent nor scalability, the startup just doesn’t match the investment strategy. The good thing is that if you are talented and check some criteria boxes, you will surely find a partner that can be a perfect match for your company.

 

 


 

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