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Fundraising for Startups 101 3

This article is written by Jeremiah Uke, a Contributor Author at Startup Istanbul.

Huw Thomas has a strong background in Innovation in the Energy Industry, his efforts contributed to driving the change in the United Kingdom to renewable energy. He launched several startups in the Energy and Sustainable Food industries as well. Most recently, he raised $3M funding in San Francisco. He has an MBA from the University of Oxford in Entrepreneurship and Venture Capital. He is also a startup coach and offers mentorship to a lot of startups across different programs.

Huw Thomas delivered a live webinar focused on raising funds for startups. He spread his session to cover 4 major points, which were:

1.Equity, Ownership, and Dilution

2.Investment and Incubators

3.What are Investors Looking out for?

4. How to appeal to Investors

While explaining some of the things investors look out for using the F I R E analogy, Thomas explained that the team is a critical point that where investors always take their time to look through especially when you are still in your early stage. They ask some major questions, including:

  1. What founders have done to date:

Investors are always wanting to know what the founders have done outside of their business over the years. This may even stretch to your time in the university or college, it sort of give the investors an assurance that you always achieve what you try to do.

  • Team Dynamic:

What your team is made up of is just as important as anything else, is one of the founders an engineer while the other is more of a sales person? This shows how you combine your strengths to get things done and is a big indicator to the investor.

  • Why aren’t other teams doing this already?

Here, the investor wants to know how unique you are, it gives a clear sign on your success if you are to start the business. It also shows the likelihood of you having a competitive advantage in the case where other teams are doing the same thing. It is totally normal for entrepreneurs to be doing the same things at the same time. One entrepreneur however, always seems to come out on top.

  • Storytelling ability

As an entrepreneur, you’ll always need to have that charisma which helps you say things simply, persuasively and concisely. This will help you communicate all the awesome things about your team. Asides charisma, you also need to learn about the pyramid principle, which will determine if you will say the most important things first, or you tell a whole story with a conclusion.

Proper knowledge about technology and intellectual property is also very important in your early stages. Finally, your network is very valuable as well, you need to be able to tell them who you are connected to and who can help you on your startup journey. The richer your network, the higher the chances of your success.

─ June 8, 2020