As a startup, raising money outside of your region can be intimidating. You may think there’s too much competition in a new, foreign market or that it’s too difficult to compete from abroad. However, getting investment in Latin America can be just as challenging, if not more difficult, than raising funds in another country such as the US.
Before pitching to an investor, you’ll need to do a significant amount of research. You must prepare yourself by answering questions that address everything from “Why are you solving this problem?” to “Is your company a fit for the VC fund?”
Here are ten questions startups should prepare to answer before meeting a VC.
I was featured in Emma McGowan’s article on Startups.co called 10 real world startup valuation methods. 10 investors shared ways that they value businesses that they invest in. I think it’s an interesting article, as it shows that there is huge variety in how different investors will look at a business. None are right or wrong, they are all specific theses that individual investors have found to be useful for them. It’s worth checking out.
My contribution to the article is at the end and is borrowed from advice Techstars mentors gave to Devin Baptiste, CEO of GroupRaise, a Magma Partners portfolio company that helps groups book events in restaurants and allows restaurants to compete for the group’s business by donating a percentage of the bill to the charity of the group’s choice. From the article: (more…)
I was included in Yitzi Weiner’s article called 99 Thought Leaders Share the 5 Most Important Things Needed to Become a Thought Leader. This is a great article with some amazing entrepreneurs and investors, you should check out the whole things. I wanted to share my portion of the article originally published on Thrive Global.
5 Things Needed to Become a Thought Leader:
Decide why you want to be a thought leader — To make yourself feel good? To be “famous”? To get invited to conferences to speak? To drive leads for your business? To start a consultancy? Something else? Pick your goal and work backward from there.
Have useful thoughts — It should go without saying, but thought leaders should provide useful content that helps people understand the world better. If you’re trying to be a thought leader simply regurgitating mealy mouthed, hedged thoughts of others, you’re likely a social media personality, not a thought leader. (more…)
Una version de este post aparece en español con el titulo Lo Que Debes Saber Antes de Invertir en Startups. También fue una charla (video).
As startups and tech investing has gone mainstream with things like AngelList, Shark Tank, The Social Network, the proliferation of accelerators and incubators, and the celebritization of founders and VCs, more money has flowed into the industry.
Most non professional investors interested in startups are starting to dabble in early stage companies as angel investors. Friends often send me deals they’re think about investing in, asking for advice.
Here’s a concrete example of a typical question from a successful entrepreneur friend looking to invest:
I am starting to look at some investments in startups that have proven initial product-market fit and revenue traction with positive gross margins. I have found some great opportunities [and] I am only targeting businesses that meet my personal criteria. My biggest concern is how I should evaluate the businesses from a valuation perspective. Is there any guide suggested on this?
I personally am finding companies that claim to have a higher valuation than my own company which has greater revenues and faster growth rates, etc. So, that puts off a bit of an alarm in my head but I realize it’s normal in the VC world. I don’t really know how to value a VC backed start up.
I decided to share my answer: (more…)