Win over your own saviour
INVESTORS: Three steps to win over your own saviour.
Present a commercial opportunity, rather than a good idea:
Riebe says entrepreneurs should present a business plan, or at the very least, an idea that is at the commercial stage. He says entrepreneurs often make the mistake of seeking funds for something they have not yet created. “A lot come up with ideas, but they don’t think them through, so they are presenting an idea, not a commercial opportunity, ” Reibe says. “What they are really saying is, ‘Will you fund me to have a job while I figure it out.’“If you are pitching for investment, you need to have a project where the intellectual property is mostly done.” Riebe says some investors are interested in ventures at the ideation stage, such as the corporate-backed accelerator program Amcom Upstart.
Explain how the investors’ equity can be liquidated to funds:
Riebe says investors consider how they can realise a lump-sum profit from the venture. In most cases, the investor is not seeking to make money from an ongoing income from sales, but will want to eventually sell their share of the company for profit. Often this means looking for projects that have a high prospect of listing or getting taken over. “A key thing is how a good idea can be executed to realise a profit in the future, ” Riebe says. “Will someone buy their company? Will they be able to list? How can their investors be able to turn their share certificate into cash? These are the questions we ask ourselves.”
Be nice, be trustworthy:
It may sound like vague advice, but Riebe says the first question he asks himself before committing funds is whether he can work with the entrepreneur. Angel investors rarely enter into silent partnerships with entrepreneurs, but will usually be involved, using their own experience and contacts to help run the company to some extent. Most contracts will include a dispute-resolution clause, an exit clause and a schedule for review by independent parties such as lawyers and accountants. But Riebe says these safety nets do not stop the investors from asking themselves the most basic of questions, such as: Do I like this person? Do I want to spend time with them? Is this person trustworthy?
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