Entrepreneurs who are financing are welcome to refer to.
Alpha said: The actual experience of entrepreneurs has a high reference value for other entrepreneurs. The original author, Nick Schweitzer, is an early entrepreneur in the AI field. He summed up his experience in getting a £1 million angel round of financing, including how to choose an investment institution, and how to communicate with investors if they are exposed to key investors. Wait. Below, enjoy.
In the summer of 2018, my co-founder and I contacted more than 30 investment institutions in three months, and finally got a £1 million angel round of financing from a top investment institution in London in September of that year.
I understand that every team will face different situations when financing. Your project direction is different. The investors you see are different, but I still have to summarize the experience of this financing to help other first time. The founders of the financing are better prepared.
1. Tell a story that attracts investors
The first thing a founder should do during the financing process is to tell a story that investors understand and are attractive. This story is not for fiction and whitewashing, but to make the company’s vision and goals clearer. It not only helps finance, it also helps the company recruit bulls and attract customers early.
My company version is like this: “We are different from other machine learning-driven startups. Instead of focusing on perception or automation, we are committed to building technologies that enhance people’s creative thinking and enhance the company. Innovation ability.”
The information we give is simple, using technology to help companies innovate. Under the current conditions, AI and perception are closer, such as visual recognition and speech recognition are hot, helping companies to improve their creativity may be more partial, but precisely because it still has room for development, as long as it can prove its model, That also has a lot of potential.
2. Actively get feedback from investors
I started to detour in this area and hesitated for too long before making formal contact with investors. Because I am worried that I have only one chance to contact the target investor, I want to polish everything to perfection. In fact, My thoughts or stories won’t be very strict from the start.Close and perfect, I should have collected feedback from investors faster.
Investors may not understand my subdivision in depth, but they understand the position of the company in my market in the market. Entrepreneurs look for commonality in investor feedback and fine-tune their stories and entrepreneurial areas to increase the chances of getting financing.
3. Don’t change your vision and strategy easily to cater to investors
After you think about your entrepreneurial vision and strategy, be firm, especially not to change your vision and strategy to cater to investors. This change may be a change in the direction of entrepreneurship, perhaps a promise of premature monetization, income generation, or premature expansion.
From the perspective of some investment institutions, the company expanded earlier, earned income earlier, and entered the next round of financing earlier, which helped to improve their investment performance and get exit opportunities. But for our entrepreneurs, we must try to resist this kind of short-term impulse. Even in this round of financing, because we are catering to investors and getting more investment, if there is a deviation in direction and strategy, To bury mine on the road of future development is not worth the candle.
Entrepreneurs can absorb the useful feedback from investors and fine-tune the entrepreneurial vision, but the general direction should not deviate. Financing activities are two-way choices. After contacting more than 30 investment institutions, we and the current top investment institution in London have chosen each other. This is based on the understanding of the market and the understanding of the entrepreneurial direction (because it is the angel round). I can’t provide too much convincing data).
4. Active “exposure” and improvement issues
No company is perfect, startups are like this, big companies are like that. As a startup company, it is very likely to encounter a series of problems including team formation and customer acquisition, which are very easy to be seen by investors. In my experience, investors find that the problem is not terrible. It is terrible that they cannot prove to investors that you have the ability and solution to solve problems in the future.
Investors need to look for a company that hopes to grow and grow in the future, not a perfect company. What entrepreneurs need to do is to let investors accept and understand the shortcomings of the company, and give solutions to how to overcome these shortcomings in the future. More importantly, to prove that their future potential is large enough, the ceiling is high enough to allow investment. People are willing to give money to help you grow together.
5. Have a sense of urgency
I am more fortunate. It is the angel round. I and the co-founders don’t have to “create data” for the next round of financing. They can have more time to polish their entrepreneurial ideas and be more “comfortable”. Choose an investment institution (because cash is not needed at this stage).
For the dayTo make the round of financing, this may be a kind of “lucky”, but the subsequent rounds cannot replicate this “lucky”. Financing needs a sense of urgency. Entrepreneurs must be prepared in advance so that investors will find that you have not thought about anything when you are talking to you, so that you will fail and waste your chance. For founders with performance and fund pressures, it is necessary to prepare for financing as early as possible and allow enough time.
In addition, entrepreneurs should tell them when they are in deep communication with investors that you plan to complete (close) the financing, which will give them a clearer expectation. If you are interested in your company, you will take the time to do more. Deep understanding, and vice versa, will give up faster, so both sides are more efficient.
6. Get in touch with key partners as early as possible
In addition to some extremely elite investment institutions, most institutions have investors at a level. The analyst or investment manager will meet with you and then try to recommend your project at the FOC meeting (you are not an opportunity to participate as an entrepreneur), but their evaluation criteria are more likely to be the business indicators of your project than Vision.
Instead, investment partners can often see more essential trends and patterns, better understand your entrepreneurial ideas and vision, and they have the ability to drive your projects within the organization. Get financing. So if an entrepreneur is very valued by a target investment institution, he should do his best to reach out to his partner at an earlier time and ensure that the partner can truly understand the unique value of your project.
7. Have a deep understanding of the target investment institution
Re-emphasizing that financing is a two-way choice process, investment institutions can have requirements for the project, and it is important for entrepreneurs to choose the investment institution that suits them, especially for early entrepreneurs. The early life of a startup company is relatively fragile, and the support of a suitable investment institution can increase the chances of survival. These support not only includes financial support, but more importantly, support in business, organization, and resources, for example, to help us introduce customers through their relationship network, or to help the company Good to live.
The so-called suitable investment institutions, one is willing to help, and the other is capable of helping. This is back to the question of knowing the key partners. As long as the partners of the target investment institution are really attracted to your company’s vision and really recognize you, then he will also have the motivation to invest resources to help you become better.
How to judge whether the target investment institution has the ability to help you, one to see the background of its partners, and the other to see the projects they have already invested. Whether the partner has the industrial background of your industry and how the development of the invested project is how to overcome the difficulties. To understand this, in addition to public information, entrepreneurs can also find ways to get direct contact with the founding project founders of this institution, and get the information they want with skill. of course,It is also positive to establish your own network within the venture capital circle itself.
This article is compiled from Medium, the original author is entrepreneur Nick Schweitzer.