Founders Advice: How to successfully attract proptech VCs
For both VCs and founders the process of finding the right match can be exhausting. While startups, especially the ones founded by first time entrepreneurs, often find it hard to attract VCs interest, investors are equally struggling: They get swamped with pitch decks, Linkedin messages or emails to talk about an investment. In this post I want to share with you three rules of thumb succeeding with proptech VCs such as Styx Urban Investments.
Styx is neither a traditional VC fund nor a pure proptech investor. What differentiates us from other players in the protech ecosystem is the Styx Living Lab: Our own testing infrastructure for startups & new technologies. It consists of 200 buildings centrally located and densely populated by a 5000+ inhabitants’ community in the city of Mannheim. For founders looking for an investment from Styx this has two implications: First, we’re not strictly focussing on core proptech. We’re also looking into adjacent smart city related fields like communitech or urban agriculture. Basically, anything we can test or apply in the Styx Living Lab is interesting for us. Second, we offer more than venture capital. With our unique methodology we help you test, validate and optimize your product with first hand industry experience and real life testing. As we thrive when putting detailed support behind our backed ventures in the Living Lab we aim to make only about 2–3 investments per year. To increase your chances of success I would like to share the following advice:
- Check our investment focus and think of your companies Styx Fit
The Styx Fit is our key decision driver. To consider an investment case, we need to see a strong fit to our living lab, our related real estate businesses or our industry network. The past months have proven that startups that could immediately demonstrate how their technology or idea can be validated in our living lab increased their chances of moving on to the next round. If you want to learn more about our philosophy or the opportunities of the Styx Living Lab, I recommend you to check our blog where we regularly share use cases and updates. Are you able to demonstrate that the Styx Living Lab can be a game changer for your startup? If you can answer this question with a resounding yes, be ensured, you’ll be moving on in the process quickly and efficiently, no matter where you’re from. Other criteria to keep in mind are (a) we’re only investing up to 500k; (b) while we are open to companies headquartered around the world, we always have our eyes open for startups with strong stakes in the DACH market.
2. Show that you’re capable of attracting strong investors and experts
Styx is a comparably small fund and tries to combine the benefits of a business angel with the advantages of traditional VC fund. As a consequence we need to handpick our investments carefully and rely on strong signals from other investors, angels or industry experts. Don’t be shy to demonstrate that your team convinced these guys to support you. It will help us to speed up the process and increase your chances of an investment, if you can explain who they are and how they contribute to your venture. In case you’re already talking to a lead investor, we’re always happy to co-invest. We only operate as lead investor once you can demonstrate a 10 out of 10 Styx fit.
3. Showcase your team — not your numbers
It sounds like one of these pieces of advice you can read on any startup blog these days (and the days before these days). But still in my daily conversations with early stage entrepreneurs I observe that founders tend to showcase their numbers more than their team. I don’t want to diminish the value of a good business case or a strong financial model. But especially in the early stages numbers are mostly based on assumptions and models. Of course we as an investor like to see your ability to work data driven and iterate quickly to push your product in a market that is considerably huge and attractive. Nevertheless, I always advise founders to put the limelight on the people behind the idea and showcase investors why you are the ones who are going to make it big. I see a lot of slides with different faces and logos on them, but usually not more than two sentences about a persons past achievements. What I rarely hear (and where I usually start guessing) is how you complement yourself as a team, what are the advantages your team has in comparison to competing teams. Of course this is something that we check as part of our due diligence but at the end of the day we rather invest in your team than in your business plan at such an early stage. If you have any way to demonstrate your success stories as individuals or team don’t limit it to name dropping.
To wrap it up: Show us who you are, who you’ve already convinced and how Styx can provide the boost you need to make it big. Feel free to draw inspiration from our current portfolio companies(link) when imagining your very own Styx Fit and feel free to shoot any remaining to our investment management team. We are looking forward to having your deck in our mailbox or you on the phone as soon as you are ready to take the next step.
