The Elevator Pitch

Startup Stories, Entrepreneurship and Strategy!

A startup investor holds a dollar bag on his right hand and his knowledge and risk averse attitude on his left. He or she scans thousands of ideas everyday to identify that one big scalable idea, shaking both hands with startup founders.

Do you remember your driving practice days? Imagine this!

You are yet a learner in the corporate world. You have already started the engine with a ‘key’- your startup idea. You accelerated your savings and efforts into your business. As a learner you are yet managing your way, watching other businesses speed up and overtake you.

And suddenly you lose control because of some aggressive drivers. Before you break to avoid any collision, LOOK TO YOUR LEFT!! You have an experienced and risk averse instructor ready to help you avoid the potholes and a CRASHHH!

The instructor is always ready to fuel more gas into your vehicle — your business. As long as you have growing mileage and unflinching concentration.

Growing mileage is not just profit. Most investors have multiple motivations for investing in a startup, aside from just pursuing a profit.

The Rewards of Startup Investing:

• Diversification: Diversify their portfolio to include a high-risk, high-reward asset class
• Entrepreneurial Community: Support new entrepreneurs and help companies that they believe in to succeed
• Networking: Meet and connect with founders, other investors, and active members of the tech community
• Relevance: Stay up-to-date with new tech trends and emerging top startups.
• Returns: Potential to make outsized returns, which far exceed returns on other types of investments, if an early investor funds a very successful startup

And unflinching concentration is achievable with six qualities in hand.

1. Passion: For the project and ambition of where it can go. In simple terms, what investors look for is evidence of the financial commitments and sacrifices already made by the entrepreneur.
2. Traction: There must be a proof of concept to show investors, which validates the commercial viability of the idea. This can be a crude MVP and not necessarily the final product.
3. Significant market size: More customers and/or frequency of purchasing is an important commercial distinction to emphasize. An investor will not be interested in funding a beautiful product that has a tiny market of available buyers.
4. Competitive advantage: When elaborating how you will be better than the incumbent, you must take time to dig deeper and not just say “because we will work harder.” How do certain geographic, cultural, or strategic advantages play into your hand?
5. Team: It’s important to show investors that there is not a concentration risk on one person and that a team has formed that is both complementary and efficient for delegating appropriate tasks.
6. Exit strategy: Have an idea of where your company can go to in the future. Balance naive and empty assertions of IPOing within three years with a more pragmatic approach to potential strategic partners. Give thought to your projections and consider the importance of elements such as unit economics.

Your next and final step:

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Originally published at https://www.thestrategistseller.com