What we learned about making your startup investment ready and how to make your startup interesting for angel investors at Enterprise Nation's Startup 2020 event in London.
Empire Elements could not miss the opportunity to attend the biggest startup show of the year. Organised by Enterprise Nation (Britain’s most active small business community) the event had plenty of talks for everyone. Hosted at King’s College in London it offered a vast range of talks from mental wellbeing, branding, SEO and social media strategy, how to start a business, how to grow a business and how to secure investor funding.
Whether you are just thinking about your startup idea or are a fast-growing company looking for an investor, there were great quality topics.
And if you could not make it to London, don’t worry, there will be another Startup 2020 event in Manchester on 25th January 2020.
Richard and Vera set the camp at South terrace, centre block which was mostly focused at startups, investments and finances.
To make your business investable, you need to look through the eyes of an investor. Investors want to know who is the person standing in front of them, what is their business about, why are they here?
Investors first look at the people behind the business — their vision, idea and motivation. Investors want to be sure you are in it for the long run, passionate about making your startup a success story. That you are not going to go away and start doing something else, they look at your story, who are you, your motivation, future plans and you as the person. They want to understand why you are doing it.
To make your business investable means making yourself investable. Lead your team, be passionate, share your ideas and get people interested in your idea and your exit strategy. If you can do that, that’s the hard part over.
An impressive, engaging pitch deck will give you a high starting point. Clearly demonstrating your idea and what you have achieved so far is essential to your future success as a startup. You have to find the right investor first. You might get through 30 or so investors that are not the right fit, so first, decide what it is you need from an investor. I’ll give you a hint, it’ not always the money. Sometimes an investor with manufacturing contacts will save your business ton of costs, improve distribution or simply help you develop the business into the next stage when choosing investors to pitch to look at their skills and what they could bring to the business. Think about their connections in the sector, talented people they know and can introduce your product. Growing your network of contacts should also be part of your strategy to make yourself investment-ready.
Do your research. Make sure you find out about your investors as much as you can, who they are, what experience they have, and what they can bring to the team. Find out what other businesses they invested in, call these businesses and talk to the CEO about their experience with the investor. Be prepared to meet a few time-wasters, people who portray themselves as serious investors, but they have neither the money or skills.
Believe in your vision, strongly and passionately and show that idea to the right person. That’s how to make your business more investable and ensure your startup growth.
How to grow your idea quickly, including the revenue? David Hart from Screencloud described his journey from an agency and Screencloud being a spin-off product which then took the main focus.
David told us that getting your business investable really early was essential for growth, funds from VC or angel investors will help you grow much faster.
You need to have a basic product which clearly solves a problem. Getting early adopters will help you build a feedback loop, and you can properly test the product with fast iterations. Building the MVP product for your startup is exactly what David focused on with Screenloud.
Significant and consistent content marketing strategy also delivered a boost in growth and is still delivering, David confirmed to the Startup 2020 audience. A successful content marketing should focus on helping to solve a problem your target audience has and building a knowledge-base of tutorials. How-to guides are what keeps bringing traffic and new customers.
David also mentioned pricing strategy and that you need to research your pricing structure. We all know the difference between price and value, so maybe your product is so valuable that you can charge a premium price. Price intelligently is a service to research how much you can charge for your product or service and how to set up your pricing strategy.
Funding your startup is the hardest part. There are different funding options, and it depends on your business which one will suit you best. Banks are not the only way any more. Ryan Hyde-Smith from Funding Options, Su Johnston from Crowdfunder and David Houghton from Seedrs discussed different approaches to funding your business.
Getting a personal loan, small business loan or financial support from a family is a debt that has to be repaid. Usually, this is the first and most common way for startups to raise money.
Crowdfunding is an incredibly popular way to get your idea off the ground with virtually no startup cost. You don’t give away equity in return for people investing. Usually, you promise the first version of your product, pre-sale of a particular product or a subscription to a service. You ask for a crowd of believers to help you fund your idea, and there are many websites out there, like Crowdfunder, Kickstarter and Indiegogo. The concept is to create your idea page and promote that page to your contacts and a wider group of small investors. Think of it like Netflix would ask you to invest £200 for a lifetime membership. You would take that now, wouldn’t you?
Another way is to sell equity. This is a popular way to raise cash for established startups and smaller businesses. Mainly to fund rapid growth or geographical expansion. There are angel investor options or venture capital firms. The main difference between the two is that an angel investor brings not only cash but experience and contacts to expand your startup idea, to help you polish it into a lean business. Venture capital firms are, on the other hand, the next step, where you have already established business and look to raise cash. You need to have a grip on your business essentially.
Funding your initial idea, searching for an angel investor or raising capital are usually the hardest things you have to do as a startup entrepreneur.
MORE SUSTAINABLE YOUR BUSINESS IS, MORE INVESTMENTS IT WILL ATTRACT
The last session of the day was a talk by Chris Barrett , an angel investor from London who gave us a unique insight into what investors look for.
“Things that will make big changes” says Chris and adds that solving challenges are equally important. Tackling climate change, energy, transportation, plastic problem, health and pharmaceutical. Whatever you are bringing to help and solve those challenges. Having assets and intellectual property also makes your business more attractive to investors.
The initial elevator pitch is significant and having a clear idea about what you are doing and the problem you are solving.
Being SEIS / EIS investment scheme eligible startup also helps tremendously and improves your chances of getting an angel investor support. This scheme is a governments tax relief to individual investors who buy shares in your company.
Technology and innovation are attractive fields. If your startup shows signs of growth, it validates the idea, and an investor is more likely to invest in your startup and yourself as a CEO.
London startup scene is growing fast. The year 2020 marked the end of 3 years of political uncertainty and also the end of the decade. There is a lot to look for; next decade is going to be exciting times for startups and technology companies, especially those in London. There is a sense of excitement, opportunity and indeed, a new generation of entrepreneurs and startups.
London is the third-largest tech hub in the world, and leading startup hub in Europe is known for its vibrant community, a high concentration of capital and a massive concentration of international talent.