what should startups look for in investors, other than money?

What should startups look for in investors (other than money)?

SouthStartConf 2013

Leni Mayo

@lenidot

This question isn’t asked often enough

What does Google think?

The world is changing

Lets assume you are

• An investable startup

• Raising money for sensible reasons

• Tons of caveats … we’ll get to those later

The working relationship lasts longer than the money

Interpersonal aspects

• Trust

• Empathy

• Patience

• Adaption

• Perspective

• Mirroring

• Has time, responds

Human naturebeing what it is

sometimes,

what we want

isn’t what we need to grow

Where am I going to find these paragons?

Positive Signals

• Prior startup founder experience

• Endorsements from other startups

Lead Investors vs Followers

Lead Investors

• Step up first

• Set the price and terms

• Take a meaningful piece of the round

• (often) represents the round on the board

Followers

• Rely on the leader for pricing, terms, diligence

• Are easier to find than leaders

Reputation

“If I had a startup and Steve Jobs wanted to invest in it, I'd give him the stock for $10, just to be able to brag that he was an investor”

– Paul Graham, “How to fund a startup”, 2006

Megaphone

During Courtship

• Where are we heading (vision)?

• How are we going to get there (route)?

– steps along the way: profitability, growth?

– need / want more capital down the road?

Caveats

Aussie startup thought leadership comes out of USA

Don’t drink the koolade!

(Your circumstances and ecosystem are different)

MediaVC

Accelerators

In Australia

Raised money early:

• Seek

• FreeLancer

• TechnologyOne

Bootstrapped:

• 99designs

• CampaignMonitor

• HalfBrick

• (Internode, iinet, Northern Territory? Tasmania ?)

What’s right for you?

Credits

@chrisdahl@ivanlim@jamessmacgregor@michaeldewildt@shandsaker@sw@tomhoward

Questions?

@lenidot

moniker.net