Investors like data. The same data. The same fucking data.
When we first started raising money for BrightWork it was painfully obvious what questions we were going to be asked and how often those same questions would come up from different investors. The answer? Every single fucking one. Well, almost.
When you are raising money for your startup it’s easy to fall into their trap. You see, investors like to put companies in a bucket. Now not all investors do this, but a wild majority do and, if you’ve raised money in the past couple of years, chances are you have run into these investors (or all of them).
The problem with this is that companies, especially early stage startups, do not fit in a convenient set of data points. Every company is different. All of these contributing factors include team, financials, industry, traction, etc. With so many different stages and variables, companies need help individually. Yet so many investors ask the same exact questions and, in their head, they’re looking for your company to be hitting specific milestones for them to be interested.
Stop me if you’ve heard these before….
- How many customers do you have paying you for your service?
- How big is your team?
- Who are your competitors and how are you different?
- What’s your MRR and how much is that growing month-over-month?
Now, to be fair, not every investor does this. In fact, some of the best investors look at the whole picture to see if there is a fit and by no means am I attempting to simplify how every investor looks at a business. The point I’m trying to make here is that most investors are very data driven. They have a set of data points that matter most to them and your job as an entrepreneur is to figure out how to reconcile your progress with where they need to see your company before they jump in with both feet.
For investors, they need to stop looking at companies as another data point within their aggregate database. They need to see that every company is struggling with different things and know where they can be of value. If they cannot provide anything other than a check, then they are not providing value beyond a monetary contribution. And for an early stage startup, that is called “dumb money.”
