A good team of investors can be the foundation of your startup’s success, but a bad one can obliterate even the strongest ideas. Investors can provide more than capital to your business; they can become resources for organizing, marketing, and realizing ideas.
Knowing what to look for in an investor and being able to attract the best kind of investors are vital skills for any new entrepreneur.
Certainly, a lot of the interaction between startups and investors takes place during and after financing rounds, but there are a lot of things that entrepreneurs can be doing to set themselves up for success.
This period we have been lucky enough to get advice from Paul Miller and Kojo Sarpong; founders of Logique, a tech company which was able to raise US$4.8 million from local investors to develop software that transforms how work is done in the office.
The funds were raised to build a suite of enterprise products, that would result in a shift from the use of analogue tools like the whiteboard, legal pads, notebooks for visitors, to a more digital approach to getting work done.
Although the company recognises that the analogue tools were still some of the best ways for business people to collaborate with one another, it hopes to provide digital tools that perform similar functions that will make work easier and faster.
Logique shared some tips with Business Insider Sub Saharan Africa.
Do your homework and make a list of potential investors
There are many investors for you to choose from, however, you should not make a list of 30 people you want to talk to because you don’t want to give the impression that you would take anybody’s money. Do a short list instead. But in order to have a good short list, you need to do your research and see who is the right investor. Check their portfolio, their style of investment and see if you fit the profile before reaching out. So, when it comes to fund raising as a startup there’s really no such thing as a one night stand.
Help investors understand the business behind your startup
Know how to sell your product. Your minimal viable product is not the product but the process. When are talking to investors, you can talk about all the big game on how much your technology is going to impact. It is very important to help them understand the business and the customers you are building it for.
You have to get a working prototype. Build a team that is not so much about the dollar signs but also about building a product as well as a company culture. This will help your work merit the trust of your investor.
Know your customers
Logique tells Business Insider Sub Saharan Africa that it would do entrepreneurs a whole lot of good if they know the customers that they are building the product for. If you don t want to know your customers pack your bag and go home.