Nova’s 2020 Tech Startup Programme Now Open - click here to apply
Updated 24 October 18
Unfortunately, just having a good idea for a tech business isn’t enough to get investment. Investors listen to multiple pitches a week, sometimes a day, so you need to make it hard for them not to invest in you.
Here’s our guide on how to hit the investment criteria.
Investors will know that a startup worth funding solves some kind of problem in the world.
If you can explain what problem your business solves and show that it affects a good sized group of people, you’ll be demonstrating your idea’s potential for success. Obviously, this is crucial to your board of investors. They won’t waste their time investing in an idea that has no possibility for growth.
As the entrepreneur and founder, investors will be looking to see if you have valuable knowledge on the domain or sector your business involves.
If this isn’t you, having a solid relationship with someone who has this expertise is essential. Whether that’s bringing in another co-founder or keeping a strong connection on board, investors will want to see that you have access to domain knowledge.
Although they might not admit it, investors don’t know everything. So, if your target users think your product is a good idea and they want to use it, investors are more likely to think so too.
Having a user panel ready to go also demonstrates your easy access to usability testing. The startup that learns the fastest will always do best. This is because the quicker you can validate your ideas with real users, the quicker you can improve and develop your solution.
Building the wrong product and not getting to market fast enough are two of the top reasons startups fail. Having a panel of real users lined up is a great way to avoid these.
A common mistake that founders make is saying that they have a long list of revenue streams. By saying this, it’s almost an admission that you have no idea how to make money. Most successful businesses have one, or perhaps two, revenue models - not more.
Investors are also more likely to lean towards businesses that have a B2B (business to business) revenue and marketing model. Going direct to the consumer (B2C) can mean spending thousands of pounds on marketing campaigns, whereas, B2B marketing is generally more cost effective.
It’s highly likely that your business will have competitors, so don’t pretend you don’t. By showing exactly who and what the competition does, then proving you’re different and better, you will be putting yourself in a good position for investment.
If you really think there’s nothing out there like your idea, highlight businesses or products in a similar field and mention what your target market are currently using to solve this problem. This will help investors understand what market opportunity there is for your startup.
You only get 10, maybe 20 minutes, to impress investors and secure their investment and support. Make sure you spend that time talking about the things they want to hear.