There are many reasons why your supposed investors would not dare to sacrifice any funds to be called an investment in your startup. These reasons could range from the market you address to you yourself as a startup founder. In this post, I recalled a twitter experience I had with popular founder of fintech company, Paga, where he told me that he does “not invest in ideas, I invest in people”.
This goes to show how both your personality and your idea could hinder your chance of getting an investment from any outfit, be it from an individual or a corporate outfit. You have to get all your cards right to secure funds.
Most investment outfits are big corporations, so you have to understand that some of the people you pitch to are only a representative of the company, so they make decisions to invest, or not, in the best interest of the company so as to save their own job. So the thought of using emotions to secure investments should be annulled at this point.
We would be taking a look at the possible reasons why after your pitch, you fail to secure the investment you thought you would, or any investment at all. You do also have to know that everybody (investors) are allowed to have their reservations about your idea or product. Nevertheless, let’s move.
Is your idea/startup creative enough?
There’s a reason why a property listing platform like ToLet.com.ng secured a huge investment from SPARK, while other start-ups with the exact same idea could not do so. The thing is those start-ups that came copy cating the exact concept of ToLet.com.ng are not being creative and the wise and shrewd investors knows that.
Why would they want to invest in an exact replica of ToLet, not offering anything different or unique, knowing fully well that customers would have been loyal to the core. If they do, how would they make profits?
So bottom line is, to secure investments for your startup or idea, then it is important that you add a stint of creativity to it. There has to be something that differentiates you from the already made in the market, and you need to have that one thing that’d enable you to drag customers with them.
How profitable is your venture going to be for the investors?
To be realistic with you, no investor would invest in a startup that has no potentials for making profits at all. Truth is, there are long term investors and short term ones too but every investor regardless is always conscious of how much he can make from his initial investment in a particular time frame. It’s called Return on investment (ROI).
To beat this, I’d advice you to build and streamline you startup or idea concept and put it out to them, highlighting it’s profit making capabilities. Please be realistic with these capabilities and make sure the structure you build is followed to the core.
How about YOU?
Earlier, I made mentioned of the “investing in people” statement that Tayo Oviosu wrote while tweeting back at me. I had no choice but to also reason along with him. You can have a killer startup idea, but when your potential investors do not see an entrepreneur in you, then they’re no more ‘potential’.
Thing is, you have to show a total mastery of your startup or the idea while pitching to them, if not, you would leave them with no choice than pass on investing in you. This is because, if they do invest in your killer startup or idea, who will manage it? YOU. and there is a very big chance that you will ruin the whole thing with your incompetence?
Want an advice? Brush up your presentation skills and management too to show a total mastery of whatever kind of idea you are pitching to an investor.
There are many reasons investors would not spare you their funds to expand, or even start. But these ones are the major. Be sure to share your thoughts with us too. We’re waiting.