What are you ready to sacrifice?
A brilliant business idea is born, you have a great partner and you are ready to work every day – except weekends. Isn’t it fair enough? No. When pitching a business idea or a project, investors will scrutinize your willingness to invest 100%.
The startup world may sound attractive, lucrative and cool. Filled with exciting business meetings, networking and charming nights with coffee and tonnes of tasks to be completed. Most people can’t in their wildest dreams understand what it takes to succeed. It’s not only about the amount of work – it’s about the constant worry over money. The risk-taking and the loneliness when critical decisions must be taken. What kind of person are you? Don’t be surprised if the investor asks more about you than about the project…
The founder in focus
In a pitch meeting, you will not only be asked to present your business idea, the vision, the team, numbers and traction to date, the market size, your go-to-market strategy and the financial potential – you will be asked to present yourself. Who you are, your background, what you have done before, how you have solved problems and what steps you have already taken to realize your business idea. How are you working on your project? Is it part-time or day and night because you really believe in it? Experienced entrepreneurs can often share unbelievable stories about traveling criss-cross the globe, taking phone calls from all kinds of crazy places and being physically present but mentally far away… Your approach reveals your commitment. Among our portfolio companies we have had founders who after years of struggle still didn’t know if there would be cash enough for the salary payments. With a sense of urgency, they put all the effort they had to close another business deal to weather the storm. Investors want to see that warrior instinct.
The doer leads the game
Let’s not forget the question about how you solve problems. It’s good that you work hard, but of course you don’t have all the skills needed and the day still only has 24 hours. What kind of problems have you already bumped into and how did you solve them? Are family and friends helping you out, being both the marketing department and IT support? Have you made some fearless phone calls to people you don’t really know but really need help from… and convinced them to help you for free…? In demanding situations fear must be turned into adrenaline.
Show your commitment
Another aspect is money. Never underestimate the question of asking for someone else’s money like you are doing in a pitch meeting. The investors will return the question: How much money have you put into the company yourself and what are you prepared to invest going forward? It’s a more important question than it might seem to be. The question about the founder’s holdings is always a hot topic and in those cases the founder’s shares have become diluted, investors get suspicious. They will ask questions about this before every round – from the seed round until the IPO. A too small founders’ stake can be an issue. Other questions that might turn up are: Have you asked family and friends to invest – and did they? Have you taken any private loans to finance your project? We don’t want people to be reckless – we just want you to show your belief in the project.
The impressing bootstrapped company
Investors can have many different investment strategies, but they have all one thing in common: They want a return on investment and you are the one who is going to give them the kickback. That’s why they are so interested in your stubbornness, your perseverance and ability to solve problems. They listen to your vision, your plans and the calculated upside – can you also convince them about your capacity? The commitment is separating the wheat from the chaff.
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