In early 2021, I curated a series of 7 insightful investor chats aimed at equipping founders with valuable knowledge on raising venture capital funds. These engaging discussions with seasoned investors proved to be both informative and enjoyable. While there were numerous valuable insights shared, here are a few noteworthy highlights that I believe can greatly benefit founders. For a more comprehensive understanding, I encourage you to delve into the details of each investor chat event.
Absorb innovative solutions wordwide
Tatsuro Shimada started his entrepreneurial career with a vision to leverage technology for societal benefit. As the co-founder and CTO of Connehito, Inc., he spearheaded the development of Mamari, a app that fosters a supportive community among Japanese mothers. The app garnered immense popularity, attracting over 7 million users and ultimately leading to its acquisition by KDDI, a renowned telecommunications giant.
Following his successful exit, Tatsuro immerced himself in the startup ecosystems of over 40 countries by traveling and meeting founders in Asia, South America, Africa and Europe. During this transformative journey, he started angel investing and directed his passion towards supporting and investing in pre-seed or seed stage startups. Here are some key takeaways, in my conversation with him.
- Assemble a stellar team. While ideas hold importance, it is the individuals behind those ideas who truly set exceptional companies apart.
- Embrace one's own pace. While every startup undergoes similar stages in general, each project is unique. It takes time to find the right investor and build alignment between the company, its idea, the team, and the visionary outlook.
- Pay close attention to the innovation solutions in the emerging market and learn from them.
Understand your customers
Matthew Scherba has a remarkable career spanning over 25 years across a wide spectrum of tech areas. Currently serving as the Investment Director at Tern Plc, an investment firm specialising in European IoT software companies. During the investor chat, he provided invaluable insights on market analysis, technological developments, and more.
- He emphasized the importance of adopting a global perspective. Scaling an enterprise goes beyond having a superior product. It will require a strategic solution that is adaptable and scalable across diverse markets worldwide.
- Testing products and services with end-users is indispensable. Their feedback and engagement determine the viability and interest in the business proposition.
Stay focused and know what to prioritise
Prior to join Telia Ventures, YingYing has spent three years as a Senior Investment Analyst at NFT Ventures, overseeing a deal flow encompassing over 600 fintech companies. As an integral member of the Telia Ventures team, she has been involved in Nordic tech startups, including Iotcomms, Challengermode, and Varjo.
During the investor chat, she drew upon her extensive experience in investing across the Nordic and Baltic regions, sharing invaluable tactics for founders. Here are some key takeaways:
- She emphasized the importance of staying focused on product development. While early-stage startups may be eager to accelerate growth, it is essential to prioritise the creation of a robust product that offers a tangible solution. By dedicating time and effort to developing a strong foundation, startups are better positioned to attract capital, forge investor connections, and deliver significant value.
- She highlighted the significance of carefully considering the cap table. Understanding the long-term implications and maintaining adequate ownership stakes is crucial for attracting top-tier talent to join the team in the future. A well-structured cap table ensures that the startup can entice exceptional individuals who can contribute to its success.
Know your numbers really well
Leon Ge has made a significant impact by successfully scaling notable tech startups across Europe and Asia. As the Principal & Head of Asia Initiatives at Partech Partners, a leading global venture capital firm with $2 billion in assets under management and a track record of over 200 investments in five years, Leon's talent and ambition have propelled him to the forefront of the business world.
During our conversation, Leon shared invaluable insights that can benefit digital companies seeking to thrive in the competitive landscape.
- Meticulous valuation is crucial. It can potentially lead to significant challenges when raising a seed round at a high valuation. If subsequent rounds fail to maintain the same valuation, it may become difficult to secure additional funding. Moreover, if the company's performance or growth falls short of expectations, there is a risk of encountering a down-round, which can adversely impact the company's reputation.
- Comprehensive preparation of data is essential. Prior to engaging with investors, it is vital to gather and organize data that goes beyond the scope of your startup.
- Familiarize yourself with potential investors and identify the specific metrics they prioritize. By aligning your data tracking with the interests of venture capitalists, you can enhance your preparedness to swiftly close funding rounds. This strategic approach demonstrates your commitment to meeting investor expectations and increases the likelihood of successful fundraising efforts.
Develop unique value propositions
Rebecka Löthman Rydå, the accomplished Investment Director at Industrifonden, a Nordics VC with a portfolio of over 50 companies. Her expertise extends to directing significant investment projects in notable companies such as Zenith Group and Ernst & Young Sweden. Leveraging her remarkable skills for identifying right opportunities, Rebecka imparts insights for founders seeking funding:
- Embrace forward-thinking entrepreneurship: To capture the attention of investors, it is crucial to envision and create an enterprise with a cutting-edge product or service. Demonstrating the ability to predict future trends and anticipate the evolving needs of markets and consumers establishes a competitive edge. Being at the forefront of innovation is a hallmark of successful businesses.
- Cultivate uniqueness: In today's highly competitive market, differentiation is key. Developing a product or service that stands out from the competition is essential to attract investor interest.
Funding for bold ideas at any stage
Sofia Dolfe is the Principal at Index Ventures. Index Ventures, a renowned capital venture firm with a track record of investing in revolutionary ideas and exceptional teamwork. Sofia shed light on our conversations:
- Developing a compelling product that resonates with customers and fostering a growing team, investors will naturally take notice. Share the momentum of your achievements with the community and keep key investors updated with concise and pertinent news about your progress. This open communication ensures that investors remain engaged and informed about your evolving company.
- As you compile a pool of potential investors, it is essential to assess their individual strengths, weaknesses, and unique value propositions. It is important to understand how each investor can contribute to your project and leverage their collective expertise.
Conduct your own due dilligence
Michael Rager is the Manager Director of Growth Equity at DTCP. Founded in 2015, DTCP has secured over $1.0 billion from corporate and institutional investors. With an impressive background working with renowned firms like Bauer Venture Partners and Otto Group, Michael offered a few valuable tips during the discussion:
- Seize every opportunity to connect with individuals beyond your local region who are interested in relevant topics for your startup. Actively participate in seminars, conferences, and events that facilitate networking across Europe, broadening your reach globally.
- Conduct thorough research to find potential investors who align with your startup's stage, business model, and investment requirements. Ensure there is a close match between your startup and the investor's interests.
- Familiarize yourself with the general criteria that most investors seek: the team, how your product stands out in a competitive landscape, your unique value proposition and your understanding of the market.
