Seven weeks in and we’ve heard some incredibly good ideas, some good ideas with some flaws, and some fairly bad ideas. Add into the mix good and bad ideas with pitches that vary from incredibly good to incredibly poor, as well as entrepreneurs who are willing to listen to our experience and those that are not, and you’ll have a vague idea of what we get on a daily basis!
The most important bit of progress so far – we’re finalising our first investment from the start-up fund. A first investment within 7 weeks is good going given everything else we have had to deal with. I need to get my average up in order to meet my goal for the year 2014 but we’re on track – the first quarter was always going to be the slowest period. We’re in the process of finalising 8 more.
The businesses we are in the process of negotiating with are from a diverse number of industries. From retail to events management, from luxury retreats to a business that will help improve graduate employment, from fancy dress and fashion to a news service and film making.
Without wanting to let the cat out of the bag before we launch (you never know who’s reading this!) here are some of the reasons we decided to move towards finalising an investment deal for the above.
Firstly, they all had a good seed of an idea based on good and adequate research. The businesses knew their market because they had researched it well. That’s the first fundamental step for any business seeking investment. Some of the businesses were targeting a niche but lucrative markets which is always an attractive proposition because the effort and investment required to launch in a niche market is far less than for a business targeting larger, more general markets. That means the chances of success are more for niche businesses. Moreover, we ‘liked’ the people behind the businesses – that’s essential to us because we will be working with these businesses over 5 years to help them launch and exit their business successfully. By like, I don’t necessarily mean we are looking to be best of buddies with our investments – if we do, then great, but it’s not essential. ‘Like’ really means that we like their vision and goals, their willingness to listen and act upon good advice, and most importantly they displayed the right attributes to be able to achieve what they seek to with their business. I’ll say it again – a successful business is more about the people behind the business than the idea. Any experienced investor will say the same.
Finally, and this probably applies to most proposals we receive, these businesses were willing to listen and revise their proposals based on our experience and advice regarding how much they really needed to raise. It would be fair to say, like most pitches, that they were asking for investments that were too large for the stage that they were at, or had valuations of their business which far exceeded what any investor would seem acceptable. These entrepreneurs were able to understand our advice and were comfortable with it – which is made easier by the fact that we will be working with them over 5 years to maximise the success of their business.