startup entrepreneurs, the big idea, customer traction, inbound marketing

What Silicon Valley Investors Look for in Startup Ideas and Management Teams

Investors Always Say “We Invest in Teams”

That is however only partially true. If your product doesn’t make sense, if your business fundamentals don’t seem sensible, or if you have zero history of traction in the market place, your chances of Angel or Venture funding are slim.

The Importance of The Big Idea

As the cartoon implies, there are startup entrepreneurs who seek funding for products that at first glance seem really stupid. Sometimes it’s that I don’t see the potential, but sometimes the products really are stupid.

Every startup seeking funding needs The Big Idea. The big idea is the “why” that describes to others what big problem is being solved, and it is that which people other than the founders rally around.

I attended a startup conference last Friday sponsored by CalCPA at which Ephraim Lindenbaum of Advance Ventures described this as succinctly as I’ve ever heard it.

To get funded, a startup Big Idea must fall into one of two broad categories.

  • Brave New World
  • Better, Faster, Cheaper

Examples of Brave New World are Uber, Airbnb, and BitCoin. All of whom are disrupting existing industries with new ways to find a ride, find a place to stay, and store and transact money.

Examples of Better, Faster, Cheaper are LinkedIn (whose primary business model is selling details about us to businesses looking for talent), Square (simplify and reduce cost of credit card transactions), and Dropbox (who makes it easy to store and share files).

The Importance of the Management Team

I’ve heard dozens of investors make this statement, but it was Carol Sands of The Angels Forum who stated this best.

The investors have no desire or intention of running the business should you ever decide to walk away. So it’s important to them that you don’t.

They need to know that when the going gets tough (and it usually does at one point or another) the founding entrepreneurs are not going to update their resumes and find jobs, but rather will find a way to persevere.

The following words are mine, not Carol’s, but the better you project an attitude of “We will do this or die trying” the more likely you are to get funded.

The Importance of Customer or Marketplace Traction

I’ve attended dozen’s of pitch events where startup entrepreneurs are either granted meetings with potential investors or not, and in my  experience if you have no customers and no revenue you are not granted a meeting. If you have a problem with this, I suggest you get over it.

No traction equals no investment.

Need Traction? Look to Inbound Marketing

That’s where I come in.

I teach early stage entrepreneurs how to attract their audience and convert some into prospects on the cheap.

The process is called Inbound Marketing, it’s works on principals of publishing to your website (and elsewhere), SEO, and organic traffic.

I’ve seen Inbound Marketing transform businesses, but…. it’s expensive, unless you learn to do it in-house using very cheap tools.

Learn more…

Download the eBook: The 7 Fundamentals of Being Found Online

 

Related Posts

Successful Lead Generation through Content Marketing in One Easy Step Yes, the title is intentionally misleading. Content Marketing can not be done in one easy step. Having said that, the very first and some say the m...
Lead Generating Social Media Marketing is Business Blogging Social Media Marketing is the big buzz word today. You need it for your business! It generates leads! So what exactly is it? Facebook? Twitter? L...
What Impact Will the Google Mobile Friendly Update Have on Your Traffi... Sites that Are Not Mobile Friendly are ALREADY Missing Out I can't believe how much hype I'm reading about the upcoming Google mobile friendly algori...
Turning strangers to customers of your business. Inbound Marketing. Inbound marketing Each and every one of us wants traffic to our site but not any kind of traffic. We want quality traffic that is beneficial to us....
How to generate high quality leads constantly for your business Are you in a business but not constantly generating good leads? If so you're not alone. Many business expend time and energy to generate an inadequ...

Leave A Response

* Denotes Required Field