How do I come up with my ‘big idea’ or legit ‘start-up’?
If you have a little business flair or start-up and can think creatively, then ‘big ideas’ are easy to come by. To find inspiration for a new product or service, you need to identify a real-world problem and work out how to address it. People want you to find solutions to the everyday issues they come up against, so start asking questions of people and businesses to learn more about the problems they face.
How do I know my idea is viable?
The truth is, nobody really does until that product or service is launched. The best way to find out if your offering might find a market is by asking people what they want from you. Before you even begin to build anything, ask people what they’re looking for and get their input on what that should look like. If you ask questions of the right people and come up with something they will welcome, then the chances are your big idea is viable and will pique an investor’s interest.
Who should I approach for seed funding?
The first people you should approach for a little investment are those closest to you, your friends and family. It may feel awkward going to them cap in hand, but the people who love and care about you are likely to invest purely because they want to support you. Having a little money behind your venture makes you a far more attractive prospect for investors. Before you approach an outsider for seed funding, build up an ideal investor profile and look for people who fit it. If they have a background in your field and have a track record for investing in similar businesses, they may well be worth approaching.
What is the first thing an investor looks for in a new company?
The first thing an investor looks for in a founder and a new company is passion. If you can’t be enthusiastic about your product, then you can’t expect anyone else to be. Your passion and drive are what are going to instil them with confidence and get them to listen to your pitch, so you need to be passionate about the idea you are pitching.
How long should my pitch be?
Pitches in the past used to be very long documents, often exceeding thirty slides or pages of text. These days, investors are short on time and value brevity. Try to condense your pitch to a maximum of ten slides, creating a company and financial narrative to explain why you deserve their funds. Investors want to know up-front what you want from them, so make sure you put in the big ‘ask’ on the very first slide. Use the remaining slides to explore – as succinctly as possible – the gap in the market, the problem and solution and your business model. If you can do this and get their attention, then they’ll ask questions afterwards and allow you to flesh out the shortened information on your slides.
What should my team look like?
You can sell your idea on your enthusiasm, but you also need a stellar team behind you. Investors would rather see an A-grade team working on a B-grade product than a B-grade team working on the most brilliant idea. Good people are hard to find, and savvy investors know that and will be more willing to invest if you have a strong team behind you. Surround yourself with people who share your work ethic and drive, because you’re going to need their passion to secure yourself the funding you need.
My potential investor wants to bring new people on board – is this normal?
Perfectly normal! You might feel your nose is put out of joint if an investor wants to bring in new people, but try to see it from their point of view. Often a founder isn’t the best person to drive a business single-handed during the expansion phase, simply because your business is your baby, and it can sometimes be hard to take that hard-nosed outsider perspective. Expansion is very different from the initial phase of starting a business, when passion alone can drive you. Expansion means increased scrutiny and an investor can bring in people with experience of talking to banks and other officials. They are often better placed to make the business grow, so trust your investor and be open to working with their own specialist team.
Is this a good time to start expanding my company?
It’s always a good time to start expanding your company, because without growth, things can quickly start to stagnate and your business may risk stalling. Trust your instincts when it comes to seeking funding to grow your business. We’ve just come out of a fairly rocky few years, with the pandemic and Brexit creating huge uncertainty across all industries. Now we’re on more solid ground, investors are taking more chances on small companies, so it might be the right time to make an approach. Before you do, make sure you have one or two customers on your books, a little funding from friends and family and a positive cash-flow – that’s more likely to win you the investment you need.
How should I deal with being turned down?
We all get the brush-off at some point in our business lives, it’s what you do with the experience that counts. If your pitch for funding is turned down, turn that into a positive. Instead of shutting down the dialogue, get back in touch with the investor and ask for their feedback on what you did right and wrong, or why they weren’t interested in your pitch. It’s only by taking that feedback, really listening to it and making changes accordingly that you’ll really improve. Experience is what we get when we don’t get what we want. Remember that and learn from any criticisms. A brush off isn’t failure, it’s simply a bump in the road and an opportunity to learn.