The startup world is in constant buzz on both sides of the coin. And with the coin I mean the one in investors pocket for entrepreneurs to pitch for. New exciting startups are born every day bringing new possibilities for the investors and vice versa, new venture capitalists and funds are emerging in increasing pace.
Even though there are a growing numbers of investors out there, the competition on investments is though. The startups are ranked through a set of criteria and the best ones acquire the funding. Normally these criteria include innovativeness and potential IPR of the product, scalability of the business model with huge market opportunity, capable team, healthy markets and so on. One big requirement for the VC is of course a reasonable deal. Besides the last one, this is what every VC’s web page and blog entries are telling you. But what about the criteria for the investor? There are many, but here’s three to note for.
Expertize. First of all, it’s a potential waste of time to meet such investors who really don’t understand your business or, more importantly, the needs of your customers. By reaching for investors who know the game you’re in, they most likely can bring in some serious value for your business. And as good as it is to have expert board members, it’s definitely a perfect match if the investor boosts up your sales and takes the product itself into the next level. This might sound even a bit of a cliché but be sure that besides capital, the investor brings in the knowledge your team is lacking.
Trust. After finding an investor the utmost important requirement for the forthcoming success story is trust. The trust begins to build up in the investment negotiations which should seek an outcome that serves not only the investor and current owners but the startup itself. True partner focuses on the success of the company, not the optimization of an investment portfolio. Open dialogue is the key element in building up the trust. When you know your back is covered, it gives you the strength to take those big steps every day.
Commitment. It is important to share the vision and have a joint understanding of the goals and means to achieve them. It’s obvious that commitment for long term development of the company creates a positive and encouraging atmosphere and gives room for the business to evolve. When the common journey actually starts, the investor should show the commitment by taking actively part in the operations and management of the company. And hey, from this point on there are no longer our side and investor’s side. There’s one whole new team with equal and committed partners.
Jakamo closed the first round financing and we’ve been fortunate. As one, united Jakamo team!
CEO and Co-founder