Why did you start THIS Business???

The key word here is THIS! There’s an emphasis on THIS. Of all of the businesses you could have created in the world, why THIS business? I know my why, I have my story and through working to solve my own problems, my business has been created. Not only has it been created but in a time where I’m not the only one who sees the issues with funding, with pitch questions, even with business! Let’s dig deeper into the top three things an investors wants to hear and three key things what they don’t want to feel when working to understand your business.

When I talk to founders, I want to know they are solving a real problem. Not that their business has to be extremely unique but what problem are they solving, for whom, and how are they solving it! Now-a-days it’s so difficult to create a unique business. In fact, of the millions of privately owned companies that exist today, there are just over 110 that are considered unicorns. The companies with over a $1 billion valuation. This doesn’t apply to all investors but this is what many investors are looking for.

Many of the investors I know want to know if the founder is a Visionary. This is especially the case in emerging markets. A visionary is one who cannot only create a business but has the foresight to know how to scale. Visionaries are founders you may have a long-term relationship with because even if their current business doesn’t work, others have the possibility to do so.

When business gets tough, I’ve often seen founders pivot and that’s not always the answer. Most of the time, that’s not the answer if your Founder did the due diligence to understand if the market is viable. Founders of pivot a lot make me question their passion for the work they do. Are you passionate about solving the problem for your market or are you just following the latest trend, looking to focus on money, or is this just a hobby.

What an investor doesn’t want to feel when working with you.

Focusing on money, money, money

Founders often think that an investor’s focus is only money. I mean, that may be slightly true, but I have a secret that may blow your mind. That’s not always the case. Yes, they do want to know they’re going to get a good return but going back to passion, they expect you to have just as much passion…hopefully more passion…than they do about your product or service.

Seeing your business as a hobby

Traction can be a quantitative way to understand if your business is a hobby or not. If you’ve been working on your startup for many years and have no sales, which there’s little or no barrier to entry, this throws up a red flag. I want to know that this isn’t something you like to do on occasion after work or on the weekends. Having a job is no problem, you can have a 9-5 without seeming like this is a hobby for your business. Some investors will disagree with my statement hear but some will also agree.

Body Language when talking about your business can be a tell tell sign you’re not fully committed to. What I’ve seen the most as an investor is when founders have other partial started businesses in the works but none of them have gained traction. The founder is working multiple businesses just to see which one will get funding or gain traction.

Not being able to take feedback

When talking about your business, it’s okay to say you don’t know when you don’t know. It’s also okay to listen when you receive feedback without you giving a rebuttal in return. Investors will challenge your thought process when it comes to your business model. You have to discern if you should reply or not to those challenges.

What is your WHY? Why THIS business? Why YOU (which will get to in another episode)? These are all good things to think about for your current venture. Drop a note in the comments. When it comes to your business, why THIS business?

Until next time and remember…”The best way to predict the future is to create it.”