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Questions & Answers

Posted by Adam W Steeves on 2014-08-01 18:35:00
Title: What is the best way to entice an investor to seed a startup that has developed a new category of gl...
Category: Money

What is the best way to entice an investor to seed a startup that has developed a new category of global advertising? (ie: www.footrr.com) Should I create an entertaining slideshow presentation, or stick with the hard numbers and usual graphs?

Answer:

Sunil Godse
2014-09-03 09:14:00

The only thing an investor will be looking for is a return on his or her investment. With that in mind, you have to convince an investor that you have a business that solves a real problem, that will have an increasing number of customers running to sign up to footrr.com, and that the business is scalable. Since you are at the seed stage with no real revenues at this point, you have to REALLY convince the investor that you have something that will change the landscape on a very large scale.

You also have to be comfortable that if you were to bring on an investor, you will have to give away a piece of the company. You have to be comfortable with the valuation the investors gives you. Would you be comfortable if someone gave you $25K for 50% of the company? How would you use this money? And there are a lot more questions.

Investors want to see numbers, graphs, net new sign ups, your cost per acquisition, etc. A burning question I would have is how can you convince people to be comfortable in having advertising in their footer areas? Money is one attraction, but you are also talking about business relationships and close friends, two target segments that I personally would not feel comfortable having advertising sent to. I want to ensure I am frank with my opinion and not lead you on a path with some false expectations. Can you convince a large corporation to do this?

You have a big hill to climb. Show that you have some solid gains in numbers, satisfactory payouts, excellent customer feedback, etc. These numbers need to be verified as I would suspect the investor would be doing this.

Lots to do on your end.

Sunil Godse, President, Radical Solutions Group