What investors look for in entrepreneurs for Funding by Managing Partner at Angel Prime Partners Video Lecture | Starting a Startup - Entrepreneurship

so like in most cases and comes to
investing there is no one right answer
for any of these things but but has best
illustrated with an example we had a
case where in a very bad entrepreneur
came to us with just an idea but the
most important ingredient before an
entrepreneur approaches an investor is
how passionate are they about the idea
and what really is their vision behind
it because that can really sway and it
made an impact in how we look at how
entrepreneurial opportunity like in most
cases the answer is it depends and it
depends on what is the need of the
startups so let's first start with what
is the minimum requirement before a
entrepreneur even approaches an investor
when a requirement is that the
entrepreneur has a burning passion to
make that idea come true to life and
second has done enough thinking to find
a viable value proposition which will
appeal to the customer so you need to
have a point of view a point of view
which is thought through deeply is
nuanced enough so that you can explain
it clearly to the personal other side so
that time you are ready to approach
funding but and this is an important one
not all startups require funding in the
startup and that really depends on the
person who is behind the company there
are you see examples of companies which
are gone through several iterations
completely bootstrap or companies which
actually got funding right when when we
just a PowerPoint so I would say that
there are fun table ideas a lot of ideas
are printable ideas but it really
depends on the entrepreneur whether they
want to go ahead and get an investor
in because it comes with a lot of lot of
other issues around it as well
so let's take just two quick examples
here in East number one you can have a
company wherein you have an idea you
have enough money to go build a product
and you actually bring it to a certain
stage where and you can demonstrate that
it is it is very good at that point it
certainly is ready for final case number
two could be where that product or
service requires a lot of capital to get
off the ground to begin with before you
can even prove that the company is this
is a valuable problem in that case you
need the funding right from the word go
so think through what are the capital
requirements for the product a high
capital requirement product means
funding immediately and no one you
actually have several choices and the
recommended path or an entrepreneur
standpoint but actually need to boost up
the venture for as long as they feel
financially comfortable and then go
ahead and seek funding so first and
foremost be very clear on what the team
is if it's one person two people or
three people just make very clear that
the team is aligned with respect to what
they are going to say when they are
going to say and what their individual
roles are it is very frustrating for
somebody who's the community looking at
startup as an investor to find that that
roles are not defined because that means
that a serious level of conversation has
not happened with respect to how the
company is going to be paid so this is
an important point even one step before
that is what I would call it pitch so
tactically you need to have a set of
slides or a couple of piece pieces of
paper slides usually work best or it
could even be a video but something
which is visual which you can engage the
other person with so unique that and now
the question is what is inside that
particular deck there are several you
know resources out there which can tell
you what are the
big things but think about concentrating
less on the material on the slide but
more about just using that is a
supporting document for you to actually
make the case because you're really
telling a story so think about this you
and your team are storytellers you're
really telling a story and that story
has to be engaging and if it's an
engaging story which people like to hear
and they think that it has got an
interesting and exciting entrepreneurs
behind them you are really only away
there so there is the story which is
like a Content itself then how you
deliver the story which is the
engagement part of it and I would really
cannot stress the importance of
practicing that particular delivery
because it takes effort we all make
mistakes when you actually do it for the
first time so take the time and effort
to do it because it shows that you care
and it's a serious business and if you
actually form a lot of basic numbers or
some basic assumptions you are making
the person the other side will probably
discount them not more when you think
don't be upset or surprised if an
investor is showing impatience and the
reason is it's not that they are
disrespecting the entrepreneur it is
just that they are probably seeing a
number of pitches in that particular day
and so getting to the point quickly
having a coherent story delivering it in
a compelling fashion and then having a
really strong team behind it which knows
what each other are about and what we're
roles are is probably the essence of
what you need
before you coming for condemnation one
thing which has to be really clear here
is that what is your ask and ask is the
money in this case along other things
you might be asking for other you know
contacts and partnership created stuff
as well but it's principally about money
so be very clear how much money you are
really asking for and why you need it so
what is the plan behind that so you
might say that my current team is so
much I want to increase it to this
particular level and these are the
milestones I need to hit and this is
what I am going to do with the funding
which I am seeking and in that
particular plan show scrappiness
right show that you are going to be
really diligent with the money which are
going to raise because your goal is to
do that with an exciting successful
company so you're looking for a plan you
have a specific cost with respect to how
much or the range which you may wish to
raise and a detailed process of how you
are going to raise that use that money
over what period of time and that will
actually you can end the pitch that
there you can start the pitch that way
it's important that any sufficient time
to actually have that conversation what
is the duration of the plan that you
need to show here I would say that show
a two-year plan with a monthly breakdown
of the first year plan so show the first
year plan month by month one two three
four one month one being you know
funding is given and the second year you
can grow show it backwaters of Q 1 Q 2 Q
3 T 4 and the third year we might just
have like a much more broader imagine
remember that the investors will
typically discount what the protections
are because entrepreneurs always have
music connections and they are you know
congenitally optimistic you know that
they need to be optimistic but the
near-term plan needs to be very solid
and you can have you know assumptions
and variations in the after the first
you know 12 to 18 months I had a lot of
focus to make sure that the near term
plan is properly detailed out and you
can show a three year plan to show you
know even more to show what the
potential opportunity sizes but remember
that folks will discount us don't spend
too much time on that but make sure the
first 20 to 18 months is well detailed
out with respect to your costs as well
as the revenues and what is the basis