Following Sherry Coutu’s piece for us last week ‘What to remember about angel investors?’ we thought we would ask Wellington, General Partner, Daniel Waterhouse a question we have been asked over the last few months by numerous ‘Silicon Roundabout’ based startups;
‘What are the magic ingredients a digital startup should possess to become a potential investment!’
Ranked 62 in Wired Magazine’s Top 100 of the UK’s digital powerbrokers and with a portfolio that includes Adviqo, Artfinder, Hailo, Livebookings, Qype and Zopa, Daniel’s thoughts are well worth listening to!
“When entrepreneurs ask me for advice to raise the awareness of potential investors, I usually answer: “It depends”. It depends on the industry, the stage, the competitive landscape and many other factors. But beyond that, there are indeed some magic ingredients which might help a company to attract the attention of a VC like me:
A focused mission:
Are you able to sum up your business and its aims on the back of a business card? This is critical for many reasons: it shows a clear focus, it means that everyone in the company can easily share in a single vision and it helps place a clear picture in an investors mind (and give them the ability to share that with their partners).
Clear customer need:
Your product addresses a clear customer need/pain point and is easily understood by your customers? That’s perfect! Even better this is something the customer values and will pay for and will keep on finding useful for a long time to come. Sustainability is critical in a world of rapid change.
Large market:
You are addressing an international market poised for rapid growth or change. A billion-dollar market potential allows room for error and the time necessary for real margins to develop.
Strong leadership (People, People, People!):
At the end, VCs invest in entrepreneurs primarily. If these guys are able to create and execute a strong vision, suspend belief, to inspire a highly-motivated team, and to reinvent themselves whenever necessary, they will ease the decision of VCs to invest in their companies.
A superior company DNA:
Only companies with a superior DNA will be able to achieve their ambitions. Fundamental prerequisites include a world-class team, a superior clock-speed, a real passion for the problem the company is solving, the ability to leverage the broader industry ecosystem and a “bang-for-the buck” mentality.
How do we check such factors, especially the latter ones? We at Wellington now have invested in more than 100 companies and have seen thousands of teams in the past decade – so we have collected tons of experience. But as any digital start-up is different, we do our homework on every potential investment within a short time as well. We talk to the entrepreneurs, their management and key employees as well as to customers, suppliers and partners. The better we understand the value proposition and the uniqueness of a business concept AND a team, the better the chance that we invest in the end. For entrepreneurs this means: Do your best to present the magic ingredients right from the beginning.”
Thank you Daniel.
To find out more about Wellington Partners visit their website at www.wellington-partners.com
Alternatively, to find out more about available office property in the Silicon Roundabout area contact Kushner at www.kushnerproperty.com
