What is “the one thing” most of the startups have constant struggles with? Is it how to find customers? Is it visibility in the market? No, most often the biggest worry is how to secure funding in order to keep on going and staying alive. We invited some of the most exciting professionals to help TryOut teams with this particular question.
On the 20th of September, TryOut teams stepped one huge step forward in tackling their funding issues and had the pleasure to be guided by three experienced mentors. Pontus Stråhlman, the vice-chairman of Finnish Business Angels Network (FiBAN) introduced the Finnish funding landscape, what type of investors TryOuts should target at and how the funding system usually works. Yrjö Ojasaar, partner at Change Ventures and a seasoned investor gave an inspiring talk about the importance of the team and how to stand out in front of investors. Jaakko Blomberg, a producer, an activist and an experienced crowd-funding guru shared his insights about when and how to create a crowdfunding campaign for your business or a single product.
During the day we all learned a lot! In order to spread the joy, here are some of the most important points which will help you to focus in the right things if you are struggling with funding.
1) Find a smart investor – It’s not only the investor’s role and privilege to choose who to give their money to. You should also be very careful and aware of the people you’re committing your company to and the real benefits they could bring into your business. Don’t just take any money that comes your way! A smart investor is someone who only invests in the area that he/she is familiar with. Do your background check well, investigate their track record, investment areas, previous investments and how did those companies do etc.
2) Money isn’t always enough – try to take benefit of investors’ networks – The biggest value might not be the investor’s money in terms of the success of your company. In many cases, the real value of a great investor is the know-how and networks you will get access to when partnering with the right person.
3) Team is super important, but don’t forget the performance indicators to convince investors – When investors (especially in the case of VCs) evaluate the team, a lot of time is spent on analyzing the teams. In some cases, the team’s role can be even 50% of the investor’s decision for investment. If so, these are the most important aspects of a strong team:
⦁ Exit – previous exits set a specific price tag to your company
⦁ Product-market fit – shows if your product/service has found love among customers
⦁ Serial entrepreneurship – previous business successes ensure the investor that you can pull it off this time as well.
⦁ A one-man team (only CEO) is never considered as a success – investors want to see that you have managed to sell your idea at least to one more person (e.g. technically skilled CTO). Would also be beneficial to have someone who knows business development in the team.
⦁ Unity of your team – you have worked together for some time already, you have had common business ventures before etc.
However, in the eyes of a smart investor, a great team is still not enough. You’ve gotta have some indicators to demonstrate your success (key performance indicators) to really convince the investor. Good examples of such indicators could be the proof of interesting customer segment and proof that there really is pure love towards your product.
Text: Kati Vuks, Community manager at Peloton Club