Securing a startup’s first round of funding can be a daunting task for many founders.
BlueCilli chief growth hacker Alan Jones told Business Insider one of the most important things for early stage startups is that “early money is fast money”.
He said founders need to be concentrating on developing their ideas and validating the product, not spending huge amounts of time with investors.
Diverting attention can be the quickest ways to “kill the startup”.
Australian startup ComWriter, a cloud-based writing application for higher education, has just closed $500,000 in angel round funding. It’s not a huge amount but, for a business which is yet to make a commercial sale, nothing to scoff at.
ComWriter CEO and founder Dr Linda Glassop explained some of the lessons she learned after pitching to investors for the first time.
She said refining the pitch, developing the business model and finding the right angels were the three elements which needed to line up.
Highlighting how important it is to be able to sell your idea quickly and succinctly, Glassop said: “I have in fact done a pitch in an elevator”.
“Staying confident, trying to get the pitch as perfect as you can but you’re always going to get challenged,” she said.
Glassop said investors wanted to know if the problem was real, that the solution had market validation and who the competitors were.
Making sure all the numbers stack up and tell a coherent story was also helpful when persuading an angel to come on board but you need to be prepared to give some of your company away.
“A small percentage of a large pie is much better then a large percentage of a small pie or no pie or all,” she said.
Don’t be scared about losing control, she said. When you’re the founder you’re usually the expert in the situation.
Glassop said the biggest realisation she had while pitching was not to underestimate how much of the pitch was about the founder.
“A lot of it was also about me,” she said. “It’s about being passionate about what I’m doing and where I’m going but not being over confident and not being arrogant.”
ComWriter was officially launched last week and is now preparing for its next round of funding.
“As one round closes another round opens,” Glassop said.