Question: What is the one most important piece of information every entrepreneur should convey to potential investors when first starting up?
"You should have scalable solutions to make the business look like it will be worth their investment, otherwise their money would be better spent elsewhere. A business with no potential for scale isn't worth investing in since investors are generally looking to make their money in many multiples back."
It's All About You
"You might have the best idea in the world, but ultimately, investors are making the decision to invest in you. Make sure you overview yourself, your credentials, experiences, values and goals so they can envision you as the leader of a successful company."
"Know what your value proposition is. Think of it this way -- how will your customers know and feel like they're getting a great deal? Can you prove this? How? Be able to convince your investors that no customer in their right mind wouldn't buy what you're selling."
"Many entrepreneurs don't even know what exit really means. Exit to many of them means failure, quitting or another worst case scenario. For investors, exit is the most important element since they are in the business of investing, hatching and exiting (Sell off, IPO, Acquisition etc) to make money -- they're not interested in running your business for the rest of their lives."
A Solid Team
"No matter how amazing you are as an entrepreneur, you need a solid team around you. Most investors will want to see a team that has experience, passion and dedication. Build a team and an advisory board that allows you to leverage their credentials and expertise."
Why You're Special
"Investors hear hundreds of pitches, to the point where they all blur together. The most important thing you can impress on them is that you are different -- you are special. Whatever makes your business different is what you should lead with. And if there isn't anything special about your business, you should head back to the drawing board."
The Problem You Solve
"Everyone has ideas and strategies, but it comes down to how big is the problem you solve, how well can you solve it and why are you the best person to solve it. Investors hear all sorts of pitches, but by simplifying your presentation down to this one main concept, your odds of success increase dramatically. "
Motivation Means Money
"Motivation moves investors. What motivated you to come up with your idea? What motivates you to start a business around it? What will motivate customers to choose your product? What should motivate the investor to not only fund you, but to follow you, from the excitement of the start-up to the challenges of the developing company? "
Invest What You're Comfortable Losing
"I always tell my potential investors that they should only invest what they are OK with losing. I want to prepare them for the worst and want them to be in a position of strength even if we fail and lose their investment. The converse --losing someone's everything -- is an awful thing to deal with."
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. The YEC promotes entrepreneurship as a solution to unemployment and underemployment and provides entrepreneurs with access to tools, mentorship, and resources that support each stage of their business’s development and growth.