Young entrepreneurs face some discouraging statistics regarding the percentages of startups that are successful, as well as the fact that many of these startups go out of business before their first fundraising.
At the outset, we, the entrepreneurs, are optimistic and full of energy, ready to conquer the world — nothing could stop us from reaching our goals. Despite unfavorable statistics, we entrepreneurs convince ourselves that, with us, it will be different. We want to believe that because our idea is so original and special, investors will immediately invest in us upon hearing our idea. So, full of motivation and harnessing some good energy, we set out to raise our first million dollars (OK, maybe a bit less…)
I remember my sheer excitement before my first meeting with investors. I had never been to one of these meetings and I did not know what to expect. I changed my outfit three times and couldn't decide whether or not to wear glasses. I wanted to project my intent seriously. I breathed deeply. Many thoughts crossed through my mind that day. I knew nothing at the time about the investment process, so I imagined some unrealistic scenarios (as I later came to realize). In one of these scenarios, I pictured an investor asking questions, who then becomes impressed after receiving a positive answer, and then everyone is shaking hands. In yet another, I imagined that end of a meeting resembled a failed employment interview, hearing "Don't call us, we'll call you." I had prepared myself for the fact that the first meeting would not end in a positive investment, and unfortunately, I was right.
Since then, I’ve had many calls and conversations that did not proceed to face-to-face meetings. Additionally, written applications often go answered. I felt like I was in a never-ending marathon without a finish line, and faced huge uncertainty after much effort and many "no" answers.
"Tell me what you're doing," a tired voice would ask me on the other end of the phone. I would excitedly describe our idea, and after a few minutes, the still-tired voice would interrupt me and say "Yes, this is very interesting, however I don't think I want to invest in this." Emails, too, would arrive in the following manner: "Hello, thank you for your application; we were very impressed. However, after some deliberation, we have decided not to proceed to another meeting. We wish you success in your future endeavors."
Our optimism continued to fade with every negative answer. In essence, people were saying "no" to your “child” who you created and nurtured solely by yourself. An entrepreneur cannot be objective about his or her product, and certainly, at some point every negative answer hurts. You enter a survival mode and the “pink horizon” begins to fade. Some entrepreneurs give up; others continue on. But the process of finding an investor is extremely exhausting. Determination is essential to bring us closer to the day the longed-for "yes" arrives.Investors Answer
What do you expect at the first meeting?
"I expect to see a good, clear PowerPoint presentation that describes market potential, intensive market analysis, milestones, and competitive service or products having good potential revenue. In addition, I expect to see a strong team, one with whom I would want to create a meaningful product. I expect to receive exact, authentic and credible answers, which indicate some deep thought. Entrepreneurs must show that they are proficient, open and credible enough to tell me about weak points. I'd like to see a strong, unified team."
Izhar Shai — a venture capital investor from Canaan Partners Israel
"I want to see that entrepreneurs are able to tell me about the product, the market and the competition. I'm less interested in business plans three years into the future; however product possibilities and market understanding is also extremely important to me. I want to see that entrepreneurs are well prepared and understand the market they are about to enter —there's nothing more depressing than an entrepreneur who is less familiar with his market than I am. Beyond that central theme, I always watch to see how the team interacts, who speaks when and where, how the team reacts to difficulties, and if they respect one another, etc. Entrepreneurs who cannot work well together after a stressful meeting would probably not fare well with the oversized stress of managing a startup."
Gigi Levi — Angel investor, Managing Partner at the NFX Foundation
From the book "Start-up without masks" by Karin Savitsky.
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