Suleman Siddiqui

CEO @ Wave Growth

Suleman Siddiqui

CEO @ Wave Growth

For Startups: What Experienced Investors Are Looking For

For Startups: What Experienced Investors Are Looking For

As part of my outreach program for Wave Growth, I attend a lot of startup conferences and events, and I always find good people to connect with there. There’s a lot of excitement during pitching sessions, and watching people articulate the solutions they’ve created for the gaps and inefficiencies they see in the world is a hopeful reminder of why I started my own business. In terms of investment potential, however, some startups are more articulate than others.

There are a few points that I personally look for in an investment opportunity. They might seem like common sense things, but they are frequently left out of product pitches, and it’s important to remember to include them if you’re creating a startup pitch of your own.

How Does It Change the World?

Entrepreneurs are the people who advance our society day by day. They look at the world and they see where something is missing or they see things that just don’t work, or don’t work well enough, and they decide to fix it. They channel their passion and their expertise, and they come up with an idea they hope will change the world.

Any idea can change the world if it’s well-executed. If you create an app and it’s the best app that anyone can create for your market, and everyone suddenly starts using it, you’ve changed the world. But when you’re pitching it as a new product to potential investors, it’s important to understand how that will work in your case.

You need to be very clear about the gap you’ve closed and the problem you’ve solved. What inefficiencies have you addressed? What was broken or missing before you created this solution?

It’s not enough to simply identify how big the market might be for your product. You need to identify which businesses or consumers would benefit from having your product and why. What specific value does it provide them? Why is your solution the best they can find? How much do they need it? What is it costing them to be without it?

These aren’t just vague numbers that you can hint at in proposals, they have to be researched and they have to be accurate. I look for people who can supply these answers with confidence.

How Are You Going to Monetize It?

I have listened to a lot of great ideas for apps, but unfortunately, a fair number of their creators don’t seem to have a solid plan to monetize what they’ve built.

If they’ve created an app to match dog owners with dog walkers, how are they going to get paid for that? Is it going to be a service-based fee?

A subscription? Are they going to generate revenue from ads? If so, how many ads, and how much per ad, and how are those contracts going to come in?

This is part of a responsible Go-To-Market strategy. I look for people who have created a plan that includes all of the activities they need to accomplish their goals.

The Capital Isn’t What You Should Be Worrying About

Usually, the first thing that startup entrepreneurs ask me is: how can we raise capital? They’re focused on the capital, but they can’t articulate what they are going to use that capital for. In business, everything is planned out.

Everything has to have a plan B, C, D, E, and F. Startup entrepreneurs have to prove that they have researched their goals, checked their conclusions, and have left themselves options in case those plans need to be modified.

Before seeking capital, you need to have a clear go-to-market strategy and a detailed financial plan. The capital comes after you match a good idea with a very good plan.

What is Your Why, And How Hard Will You Work to Complete Your Vision?

My previous points have talked a lot about defining your goals and the importance of creating process-based and goal-oriented plans, but having said that, I do think that nothing truly great happens just because you want to make money.

Truly great things happen when inspired people, usually experts in their fields, create something new for a reason greater than themselves; an idea they want to bring to fruition in order to positively affect as many lives as possible. That’s their ‘why’, and for me personally, it’s a critical part of a pitch. It’s more than defining how your product will change the world, or what value it adds. Your ‘why’ is more personal, and it demonstrates how invested you are in your idea.

You need to be very invested in your idea. I cannot overemphasize this because the work that it will take for you to be successful is daunting.

Everyone looks to Silicon Valley and the innovation that comes from that community. Half of the world’s tech billionaires live in Silicon Valley, and 44% of America’s millennials millionaires live there, but none of them were overnight successes. If you look at any thriving unicorn, you hear about them after seven, eight, or nine years. They’ve spent years struggling to push their vision, and most of them have stories about how they almost didn’t make it.

Overnight successes are a myth.

So, when a startup entrepreneur is pitching his idea, and it’s clear that he or she thinks that they’re just going to get money and they’re going to create this great application, and they’re going to throw some money at a campaign or Facebook Marketing, and all of the sudden their product is going to reach billions of people and they’re going to become the next WhatsApp, it’s basically a red flag.

That’s not how it gets done. Honestly, people slave away for years, sometimes at great personal cost, before anything becomes successful. A great idea is the first thing you need, but if you can’t execute that idea if you don’t have a plan for that idea or you don’t have the strategies in place, you will probably fail.

If you aren’t willing to work twice, or three times, as hard as your toughest contender, you will probably fail. The truth is that you are competing with people who will not take no for an answer, and you need to be willing to take that on, or form partnerships with people who have experience taking that on.

Your ‘why’ has to be strong enough to create that kind of drive. Not just in yourself, but in those around you, those who work for you, and those who would buy from you.

That’s how you change the world. All of the fame, money, success—everything else you might be looking for—will come if you are willing to work hard enough to earn it.

So, as an investor, and the CEO of Wave Growth, I’m always looking to be the Knight in Shining Armor. I like that role.

At the same time, the right candidate for me is one I can empower; an expert in their field, or a startup entrepreneur who looks at the world and says: I can make it better. I can do something about this problem.

I’m not happy leaving this the way it is, and I’m willing to do what it takes to get my vision out.

Are you someone like that? Leave your story in the comments or drop me an email. I’m always interested in hearing from people who can change the world and have created a good plan to do it.

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