Over the years I have assisted around 2,000 new start-ups many of these coming back to me as emerging scalable businesses (ESB) looking to take that next step in their growth and development. The main hurdle as we all know with ESB’s is funding. Finding that extra cash after bootstrapping themselves through the first stages of their existence. What I would like to share now with any ESB reading this is what I believe ( as an investor myself) to be the three key essential points that we would look at first in assessing any future involvement or commitment to the Project.
1. Validation of Product:
It’s been my experience that a person’s passion and absolute belief in what they do or provide can sometimes lead to assumptions of performance or at least lack of provision of evidence that their service or product delivers what they claim. Therefore it’s important to gain some independent validation to support any claims you are making. The issue here is that in the past I have suspected that the fear that a fault or perhaps even criticism of the concept could result has presented barriers and even resentment from innovators. Look at it this way, if your peers find a fault and can provide constructive criticism in terms of fixing that element are you not better off? I would rather find out and fix something before I spent time, money and reputation publicly promoting it. Having your product or concept validated by a University or Industry peer group is an excellent reference to table at a funding pitch because it’s not just your word that this is great.
2. Validate your market:
An investor likes to know that there is an interest out there in your product/service other than your own and immediate family. Starting up a business Facebook page and a LinkedIn account and start blogging your services to create an awareness of your existence is a good start. Try and get some early market traction by first asking yourself WHY someone would want to buy your product/service and then go look for the sites or places where those people “hang out”. For instance if your product or service is around Agriculture or farming then look for those sites that promote or engage in activities in and around that topic. By doing this you are establishing market awareness with likeminded people and you will start to get some steady sales even if they are only small. This will give the investor confidence that there is a demand and a chance they’ll get their ROI.
3. Management Team:
This is probably the most vital of all three keys after all investors are more often than not investing in YOU rather than solely your product or service. Your team does not necessarily have to comprise of full time employees ( FTE’s) but you will need to demonstrate that you have considered all the necessary skills and knowledge required to run your business. Areas of most concern are administration, technical knowledge, marketing skills and whether you have strategies in place to cover logics, manufacturing and general management. Do not feel that you have to be all of these things, a successful entrepreneur surrounds himself with people even more clever than themselves even if it means securing sub-contractors. Your business will die or thrive on the strength and unity of your management team, spend some time and surround yourself with the right people.