The vital skill of attracting investment

Welcome to the fourth article in our advice column here at Tech Trailblazers. Entitled “Don’t do that, do this!”, we have some assistance to help your startup negotiate the tricky topic of getting investment through the door.

Today we have the pleasure of introducing James Oakes, director of Zeal Investments. Having invested in startup companies themselves, Zeal’s investment team has a clear idea of what they want to see when considering who to give their money to.

“Success is an individual thing; it doesn’t mean the same for everyone – or every business,” explains Oakes. “Some startups dream of growing into multinational empires. Others aspire to achieve some growth and be acquired. Whatever your end goal, you first need to get your startup off the ground. And for that you need a solid combination of practical guidance and financial assistance.

“Securing funds from the right investor is a top startup business priority. However, the process needs to be managed carefully to avoid any rookie mistakes. Here are some key points to help you pitch confidently and impress investors.”

DON’T

• Don’t go solo. A successful startup is rarely, if ever, a solo mission. It’s a team effort, the product of many people’s work. Investors are cautious of lone rangers in need of funding. They are much more interested in meeting a team, gauging its chemistry, and assessing its winning potential. Don’t leave key members behind when walking into a pitch. The interested investor on the other side of the table will want to meet everyone involved, know the team they’ll be working with and understand the various roles and responsibilities.
• Don’t lose focus. In a startup, time and money are always in short supply. You’ll need to juggle many balls at once, while simultaneously maintaining balance. Your energy and attention need to be allocated optimally so be disciplined about what you focus on – and for how long. Show investors that you are able to deprioritise and move on fast when what you’re busy with is not solving your biggest problem.
• Don’t choose an investor based on money alone. The biggest investment offer is not always the best one for your business. Business success is never just about money; it’s about working with the right people who are committed to your vision. This goes for your team as well as your investors. If the investor does not subscribe to your vision and instead, wants to control the company’s direction, then you’re in for a rough ride. Choose an investor that is 100% on-board and gives your business the practical and financial assistance it needs to grow and achieve success. The investment pitch is an important moment in any startup’s life. Don’t leave your prep to the last minute; do your research, know your market, test the product, crunch the numbers and rehearse. Get that right and you’ll be well on your way to attracting the best investors – not just any investors.

DO

• Have a vision. First and foremost, you need to have a compelling vision that you can sum up in a few sentences. Make sure it answers the question: “why should your business exist?” Be clear about your overall goals but again, keep it short and to-the-point.
• Focus on your users. Your end-users are critical to your business success. You need to show potential investors that you know who your end-users are, that you understand their frustrations and can provide them with the best solution. The only way your business idea can demonstrate the potential to generate returns for its investors is if it is focused on making its users’ lives better in some way. No end-users = no revenue = no business.
• Know your competitors. Provide a succinct market overview that includes a thorough competitive analysis. You need to know your rivals almost as well as your end-users. Provide good research that includes what existing players are doing well and where they’re going wrong – and how you plan to fill the gap they’re leaving open.