Recently, I attended Anthill’s Entrepreneurs’ Night Out event in Sydney. The event featured four panelists — Domenic Carosa, Sebastien Eckersley-Maslin, Ian Lyons and Katey Shaw — and a room of enthusiastic entrepreneurs.
While many ideas were shared by both panelists and audience members, the night left me with some memorable lessons on startups and investment that deserve to be remarked upon. Here are five, in particular, that stood out:
1. People invest in people, not companies
Investors are presented with ideas and innovations to choose from. So, what typically raises one pitch above another?
The people who present it.
If time is money, who do will an investor want to spend their time with? People who are likable, trustworthy and passionate about their project.
If your potential investor wants to spend time with you, they’re probably that much more likely to want to share their money with you too.
2. People hate being sold to
Most entrepreneurs are now combining and leveraging both traditional and web-based networks to reach out globally.
For those in sales and marketing, this enables converting customers without the expense and general ‘spin’ that has often been associated with sales and marketing in the past.
In the flat world, where all competitors have an equal opportunity, customers are too savvy to be convinced by a ‘hard sell’.
3. Businesses with a recurring revenue model are the most likely to receive investment
It should come as no surprise that investors look for and appreciate a steady, stable rate of return on their investments.
As such, investments into business models that demonstrate enduring and secure recurring revenue models are appealing.
In other words, if you don’t have a recurring revenue model in your business plan yet – get one.
4. The right advisory board is invaluable
Almost without question, every highly successful company has a great board. If you’re looking for success, a superb board will help you get there.
Something that is often overlooked by first-time entrepreneurs is the importance of the chemistry between board members. You’re not looking for ‘yes men and women’ but you are looking for people with complementary, rather than competing, styles and values.
No business owner is expected to know everything; therefore an advisory board is, in essence, a mastermind.
A checklist of competencies to bear in mind when selecting your board will include experience, knowledge, access and contacts. Among the board members there are certain skills, such as sales, marketing, finance, operations, legal and fundraising, which should be covered.
When inviting your board members to sit at the table, remember that they must bring added value with them. This includes potential partnerships and industry insights, along with direct and indirect funding.
5. Smart Money, not Dumb Money
Money, in and of itself, has no intrinsic value other than being useful to buy things.
However, the knowledge and experience that the right investor has is worth more than money and potentially can help your business become a success, as opposed to a failure waiting to happen.
Entrepreneurs’ Night Out was filled with remarkable people, interesting conversations, and noteworthy networking. All the attendees, I’m sure, came away with their own lessons. It’s my hope that these top five will be useful for that budding entrepreneur in all of us.
Kim Chandler McDonald is the executive vice president, director of communications and FlatWorld navigator at KimmiC, a technology innovator in the field of cloud computing.
Image by nathalielaure