How to Convince Investors to Finance Your Startup?

One of the most important for the growth of an innovative startup is definitely the meeting with investors: it becomes important to try to understand what venture capitalists and business angels look for in a company and what aspects base their investment decisions.

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Taking a cue from his last post in the blog of the magazine entrepreuner, let’s have the advice of Richard Branson to convince investors to fund a startup tech industry, looking for food for thought for startups seeking funding.

Richard Branson is the founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, Virgin Mobile and Virgin Active. It ‘also the author of the book “Business Stripped Bare: Adventures of a Global Entrepreneur”, in which he recounts anecdotes and experiences of his busy life as an entrepreneur with a high risk tolerance.

In his post explains that in recent years the Virgin Group, thanks to the work of two investment team based in London and New York, has invested in some startup of the web based on some features that sums up in five points: it is essentially five questions, which according to Branson the founder of a startup looking for investors should be able to answer “Yes.” For each identified aspect, Branson also cites examples of startup where the Virgin Group has invested in recent years.

1. Your company offers a smart and simple solution that will improve the lives of customers?

According to Branson, this is the key to understanding if a product or service will potentially interested customers to buy it. The example shown is that of Square, which has solved the problem of making credit card payments possible through the smartphone. The company now claims to make transactions for 12 billion dollars a year.
We see that once again the attention to customer needs is the fundamental focus for any startup, just like in Customer Development Model of Steve Blank we mentioned in a recent blog article.

2. The technology offered by your company is “disruptive”?

“Disruptive” literally means “disruptive”. This term identifies a technological innovation that exceeds the technology on the market, and create a new market and a new value chain. A historical example of innovation and revolutionary “disruptive” is the invention of the automobile.
A startup that offers a product based on technology “disruptive,” according to Branson, has the ability to offer a solution that will make a real difference in the daily lives of its customers, so that they are likely to buy your product a second time.
The example cited is Hailo, the taxi app that allows passengers to find the nearest taxi free of charge and at the same time offering a service to the taxi drivers, who spend 40% of their time on the street to look for customers.

3. Your company is able to offer customers greater choice and better access?

Here the focus is on the concept of accessibility, which is also essential when it comes to startups and not only that: it is a matter which in the opinion of Branson is important for all companies, at any point in their business life. The startup Codecademy is leading for example, that allows anyone with an internet connection can access free of charge to basic programming skills using a simple interface that has crushed the possible competitors.

4. Your product / service encourages customers to share their work and experiences?

At this point Branson introduces another very important topic for technology and innovation, the sharing is a crucial aspect in the world of web technologies and digital. It is a prime example Pinterest, famous sharing platform for photographs, which made fun of sharing their gear.

5. Your company takes care of the people and the planet, working in a sustainable way?

Sustainable development is a further crucial point for global economic development to the present day. In the vision of the Virgin Group, any company can make a difference: the younger firms can address local problems, growing businesses can tackle national problems, large companies can address global problems. Just think of examples such as Twitter and Tumblr, which have opened up new frontiers for communication and sharing at global level.

In summary, the vision of the Virgin Group also find concepts such as customer focus, technological innovation, accessibility, sharing and sustainability: the conclusion of Branson is that startups are able to provide products and services with these characteristics are more likely to build businesses of long duration and will be influential on the markets in the future.

Kevin Kholi

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