8 Pointers to Help You Find the Right Investor

  1. Not just about the money: We once quizzed an associate, of a billion-dollar VC firm, “How will you help us besides raising some funds?” A genuine query that allowed me to gauge their philosophy. “We can only write big checks. Don’t expect much else” was the trite response. We didn’t pursue that collaboration much further. We see an investor and entrepreneur as two parts of a whole, a boat if you will. To get anywhere we have to paddle as one unit. We will paddle hard and well but do expect some guidance, in terms of navigation, from the investor’s end, as well.
  2. Are you experienced?: We always get this straight out of the way. My startup works in healthcare and deals with electronic health records and epidemiology. We are into mathematical modeling and predictive analytics. Simple query, “Have you worked with healthcare startup before? Or is any of your startups are working with machine learning?” And a frequent response is, “We mostly work in e-commerce and social media…” There is no point in working with inexperienced investors.
  3. Chasing growth: “What kind of growth do you expect?” We asked of an analyst once. And the predictable response, “Of course, we want to get 3x, 5x, 10x returns.” Hmmm…and I couldn’t resist a follow-up, “Do you have any timeline in mind?” His prompt and articulate response, “As soon as possible…say 2–3 years”. This is where it became clear that the analyst really did not understand the challenges of healthcare, in developing countries. Traction and growth are important but one should also realize the domain and area of application. Building a healthcare startup is very different from building a social media or an e-commerce startup, especially for a developing country like India.
  4. Leverage the network: An investor has to be able to get you in touch with the right people — consumers, clients, and subject-matter experts. Money won’t do you much good if you have nothing to do with it. Often more important than the funds, is the network of the investors.
  5. Help in talent acquisition: “Would you help us in talent acquisition?” We once asked a Principal of an Indian VC firm. He replied “Here I will be very blunt with you. We will not help with that. It is the entrepreneur’s and the startup’s task to do so”. We did agree to some extent since scouting for talent and conducting interviews, IS time-consuming. But for first-time entrepreneurs especially; this can be very demanding. And investors should protect their investment by helping you attract the right crowd. People make or break the company. Simple truth.
  6. High-impact innovation: Look to find angels and VCs who are into solving high-impact problems. I would personally love to meet an angel or a VC who would consider building a product capable of transforming thousands of lives, rather than building a startup with million or billion dollars in evaluation.
  7. One-size-fits-only-one: We refuse to mechanically adopt or copy an approach that worked elsewhere in another demographic, in any part of the world. Most Indian startups succumb to this illness of what seems to be the ‘tried-and-tested’ approach. Caution: Don’t work with VCs who encourage copy-and-paste models.
  8. Basic etiquette and civility: Does one really have to point out that punctuality is important? Being late for a scheduled call by close to an hour, is a tragic waste of time. Calling from places with bad reception, or glitchy and frozen faces on Skype are really not the kind of statement that a high-flying investor needs to make.
Credit: Inc.com

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saurabh.singh

saurabh.singh

Healthcare Entrepreneur, Computational Scientist