Since we’ve started advising companies, a variety of signals have made it easy to pick the experienced entrepreneurs from the first-timers. Inexperienced entrepreneurs often have a ton of potential, but need some coaching to bring it out. Many of the behaviors we notice are the same, so we made a list to help people out.
Here are 6 ways to seem more experienced when speaking with investors and advisors…
- Trust your business partners. Demanding an NDA is not a good way to start any business relationship, let alone one with someone you’re asking to put money into your company. Most investors and advisers, including us, are hesitant to sign NDAs for a variety of reasons. Build trust and the right contract will follow.
- Focus on realistic investments. One of the most notorious marks of a novice entrepreneur is to walk into a Venture Capitalist’s office, fire up a PowerPoint and ask for a million dollars. Hey, maybe it will work for you…but it’s probably smarter to focus on getting realistic amounts of money to start your company. Start building relationships with the people who could invest a million dollars at the right time, but don’t necessarily pitch them yet-you’re probably not ready. Ask them for advice and let them get to know you.
- Build a product-oriented founding team. Especially in New York, so many entrepreneurs have this misconception that ideas alone are worth something. Creating the product is usually an after-thought. Investors want to work with competent doers, not just thinkers. Focus on results.
- Create a simple working product. Many entrepreneurs write a 50-page business plan with detailed market research, do extensive financial modeling and give embellished biographies about the team. That’s cute, but a working product is a lot more useful for raising money. And no one expects your initial product to be perfect. Think MVP, the minimum viable product, and start there… no more, no less.
- Know that you don’t know everything (but you do know some things). You should come to the table with investors and advisors as equals. You should not be submissive, nor should you be domineering: you should be respectful and inquisitive. Even when dealing with people who have made millions of dollars, it’s important to show confidence. They have money, but you have two things that they don’t: a fresh perspective and tons of energy. You’ll come to realize that these two traits are even more scarce than deep pockets.
- Work with investors and advisors as partners, not bosses. Respect that they may have a completely different skill set than you, and that that doesn’t mean it’s not valuable. It’s important to work well in teams with complementary skills. Don’t be afraid to speak up, and share your thoughts and experience with others.
Think otherwise? Have a related experience? Share below.