Some tips for those who are looking for an investor in their startup
Recently, there has been a lot of discussion about the problem of finding investors for a startup, I can hardly give universal advice. But there are fundamentally important points that you need to pay attention to when looking for an investor.
* A poorly chosen investor is worse than none. Getting a share in a startup, the investor automatically begins to influence the strategy of your company. As the fate of the company, and your fate as its founder, primarily depends on a well-written investment agreement. The wrong choice of an investor in combination with an illiterate contract can be fatal for a startup.
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* Your interests must coincide with the interests of the investor. Different types of investors have different goals. At first glance, an absolutely illogical thing happens very often. Entrepreneurs turn to venture funds with projects that promise a good guaranteed profit, and do not find interest among investors. This is primarily due to the fact that venture capital funds are simply not interested in companies in which you need to invest, say, $ 300,000 and continue to receive $ 1,000,000 annually in the form of dividends. If the size of the fund, for example, $ 150M, then he simply can not afford to manage investments less than, say, $ 1M. No less important is the fact that venture funds are usually not interested in long-term stable income in the form of dividends. Their goal is to be able to sell their stake in the company in 5-7 years (the typical life of the fund) and return their investments by a factor of 10. At the same time, the project described above can be extremely interesting for business angels or private investors.
* The sphere of interests of venture capitalists does not include the abstract development of science. Creating and using unique technologies allows you to break away from competitors and makes your idea difficult to reproduce. But in order for a project to become investment-attractive, it must first of all be focused on people, on future consumers of your product or service. That is, the main goal of your startup should be the solution of a real problem that actually exists in people.
You can learn more about the basics of investment from my presentation that I did at the Summer School of the Novosibirsk Academpark, it is available at Slideshare.com
* A poorly chosen investor is worse than none. Getting a share in a startup, the investor automatically begins to influence the strategy of your company. As the fate of the company, and your fate as its founder, primarily depends on a well-written investment agreement. The wrong choice of an investor in combination with an illiterate contract can be fatal for a startup.
')
* Your interests must coincide with the interests of the investor. Different types of investors have different goals. At first glance, an absolutely illogical thing happens very often. Entrepreneurs turn to venture funds with projects that promise a good guaranteed profit, and do not find interest among investors. This is primarily due to the fact that venture capital funds are simply not interested in companies in which you need to invest, say, $ 300,000 and continue to receive $ 1,000,000 annually in the form of dividends. If the size of the fund, for example, $ 150M, then he simply can not afford to manage investments less than, say, $ 1M. No less important is the fact that venture funds are usually not interested in long-term stable income in the form of dividends. Their goal is to be able to sell their stake in the company in 5-7 years (the typical life of the fund) and return their investments by a factor of 10. At the same time, the project described above can be extremely interesting for business angels or private investors.
* The sphere of interests of venture capitalists does not include the abstract development of science. Creating and using unique technologies allows you to break away from competitors and makes your idea difficult to reproduce. But in order for a project to become investment-attractive, it must first of all be focused on people, on future consumers of your product or service. That is, the main goal of your startup should be the solution of a real problem that actually exists in people.
You can learn more about the basics of investment from my presentation that I did at the Summer School of the Novosibirsk Academpark, it is available at Slideshare.com
Source: https://habr.com/ru/post/125080/
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