The Investors role after capitilisation
OK, so you are an Investor and have put some money into a startup, someone you know, you liked their idea, you’ve know them a while, you trust them, so is your money now in the lap of the gods, the roll of the dice?
Well some of the most successful startups will tell you that it should not be like that. In fact the startup entrepreneur does not want to feel alone and if investors and the founder work together you can really affect a positive change.
As an investor you probably have some market experience and industry knowledge that could benefit the startup. Are there any introductions you could make, any sales leads, or other critical game changers? Many top Investors lay out what they can do for their startup drawing on their network.
What we know works well is; to committing a certain amount of time per month (even as little as an hour) to serve as a sounding board and making introductions to strategic partners and other investors. First time entrepreneurs can really benefit from that support in picking the right people to join the team, which is among the most important tasks startups have to nail.
An investor will probably have seen the challenges that entrepreneurs face moving through growth changes even before the founder sees them, and should be ready to help support through consistent communication
That being said, the investor should know the difference between support and distraction, if your founder has gotten his idea so far that he has actually got seed funding and is forging ahead, then he is unlikely to be an extreme introvert, they would have learned the basics of asking for help when called to do so.
A mutual communication time and place is set between forward thinking Investors and founders so that they both can anticipate their time together and use if progressively. Quarterly is the norm, but many feel monthly meetups are best for them.
A good example of a regular ‘to chat about’ list includes:
- Company status: Where we are with short term and long term goals.
- K.P.I.’s: How the business is being evaluated.
- Strategic relationships: Is there anyone we could call upon, need or utilize?
- News releases: Press mentions, events, speaking engagements, branding etc.
- Founders take: Letting the founder have a real heart to heart say how they are doing personally, and how they feel the business is going.
- Investors take: What the investor feels and how things can be improved.
It’s important to remember; there are a lot of emotions in running a successful startup, possibly one of the reasons the female entrepreneurs fare better than men in many cases as they can express emotions easier.
At the end of the day the Investor can be a ‘God send’ to the business, and everyone ends up winning, they can open doors for the founder where doors were previously locked.
An Investor who is worth his weight in Gold is the one who is a brand ambassador and loves the business as much as the founder does, and is with the founder about the idea more than the numbers. They should use the company’s product or service, and offer constructive feedback, they will tell all their friends, and bring it up at every opportunity. Word of mouth is the best marketing, and as an investor, you are in a perfect position to help multiply the number of potential customers out there.
Not all startups need the same thing:
Some startups seed funding may be just to get the initial idea out of the garage and onto the street and does not always need a C.T.O. and a C.F.O. and many other partners in its embryonic stages.
I have discussed this in an earlier blog about running a business alone. Ask some of us how much we pay our CFO and many would ask why the hell do we need a Chief Finance Officer? You will later but where many founders are right now, they feel they do not need that kind of liability, unless of course he comes with a lot of money, experience, and knows a lot of very influential people who can affect major change, then he quickly changes from a liability to an asset.
It’s also important not to confuse online business with traditional business. A decent online business have probably been successful for a number of years already due to the tiny costs associated with internet startups, in that; in the technological era we live in, a school kid can get a decent sized number of visitors to a website that will attract corporate attention, namely Mr. Zuckerberg. The rest of the business can be encased around the original idea later.
Netmedia Biz-find has since 2009 operated on a $10 a month server and that was pretty much the only thing that was mentioned in the costs side of the business, until the traffic spiked and the server company started to bitch about the bandwidth and they had to upgrade to a V.P.S.
Investors need to recognize where and when to really get involved, Facebook was a ‘college project’ and part of the success is that the original owners are more or less allowed to keep it as it was originally made and the investors just help grow the idea and not lose the essence of what makes it great. Did the original Investors say well Mr. Z you have no C.T.O. or C.F.O. so really we can’t look at you? No they said WOW! This is what you have? OK right, just keep doing that, and we will do what we are good at; and build a massive shop around you.
Great investors see something before it has happened and get involved to help and grow the business and nurture their founders, and this symbiotic relationship has two major and massive side effects, one; the bragging rights to say you knew this company when they were living out of a bedroom and saw what many did not see.
And two; you get stinking rich of the idea!
Soon the initial seed funding for Netmedia/Biz-find will close, and so will your opportunity to be part of the only lead generation site in Asia that is cold calling company owners to tell them we have customers who want to buy what they sell, now we love making those kinds of calls because the dynamic is completely different from trying to sell something over the phone.
That and the fact we are offering all share holders free marketing via Netmedia our social media marketing business.
And that we expect to sell in 2020 for around 50-100Million U.S.D.!
When we started to attract attention for seed funding; we sold shares at 500 THB, now they are 5000 THB a share, see a pattern here?
Want to know more? Contact email@example.com