In this article I’d like to talk to you a bit about how you ought to better choose your investor so you have a more mature vision of what it means when someone invests in you, because just like with other things in life, not everything is equal.
Are you an entrepreneur who needs funding to develop your project? Does your startup need capital to continue growing? If that’s the case, I think this post will greatly interest you, because if you’ve chosen the path to Business Angel investor and/or Venture Capital, you should know a series of tips, important keys to best choose your travelling companions, a type of partner, the investor, who like any other partner can help to pave your way… or not.
Through my long journey I’ve encountered diverse profiles of entrepreneurs who need investments for their projects, because let’s be honest, everything has a price, even your internet connection.
But before getting into the thick of it, I’d like to offer you a little background information. Since the beginning of the economic crisis in August 2007 our entrepreneurial ecosystem started to shine a little more and with it came a boom in investments. The new generation of investors saw the clouds clear when they saw the word startup since it’s associated with high profitability no matter what field it’s related to. Let me let you in on some secrets in the investing world, professional investing has some rules to follow.
In this boom of offer and demand there are entrepreneurs – let’s hope it’s not your case- you haven’t got a mature vision of what it means to have an investor in their project, so they cling to whoever passes by, without asking themselves the following questions:
- Who are they?
- Are they really a professional investor? Have they invested before? And if so, in what kinds of projects?
- Have they ever been or are they currently an entrepreneur?
- If they have been or are an entrepreneur, what type of project have they launched?
- Do they have prior knowledge of the sector I work in?
Or in other words:
Would you let just anyone into your house?
But even still you need to take certain precautionary measures, because an investor isn’t the same thing as someone who loans you money or a speculator.
Real investors take risks
Real investors listen to you, they don’t rush, they don’t assume anything, and especially when it comes to the capital you need they don’t offer without previously studying your project. And that doesn’t happen overnight.
But you should also know the advantages of having investors, because even though you may lack funding, you are the primary investor since it’s your idea; and even more so if you’re already in the execution stage with some financing already invested by yourself. You’re not only an investor, but you also know the ins and outs of your project. Great, now it would also be a good thing if you’re able to pitch it, right?
The world of professional investing has its own set of rules that you shouldn’t dismiss, because like everything else in life:
“Not everything is equal”
On April 20 of this year Ainder.net took part in the event ‘Starting up Online’ by the Technology Centre at the University of Jaen in Linares, Andalusia, Spain. There, Rodolfo Carpintier, CEO of Digital Assets Deployment (DAD), one of the main investment companies in Spain and internationally known, exposed the difference between viable projects and investable projects. Professional investors rather go after investable projects, projects which can scale or with the probability to reach significant profits. And this corresponds to the entrepreneurial ‘big leagues’.
So, I ask you this:
Is your project viable or investable? Because this question also goes hand in hand with the type of investor you’ll need and their characteristics. Think about it…
And remember that the more similarity there is between the parties the better relationship you’ll have with your investor since you’ll be able to incorporate their experience and knowledge into the execution of your project, improving its possibilities of success.
Ana Queraltó is CEO of ainder.net, an international network created specifically for entrepreneurs, startups, and businesses whose mission is to facilitate the startup ecosystem and their business trajectory through a diverse space online, adapted to the needs of each user and the stage each entrepreneur finds themselves in.
Ana is a huge defender of continuing and optimizing the processes, mostly, of technology projects. She likes to get to the root of the problem and find solutions. She loves to create, do sport, music and interact with any entrepreneur who crosses her path in order to help them and their projects. She is an expert in online structures, management systems and entrepreneurship.
- Twitter: @AINDER_2014