Scott Magids is 33, the co-founder of an interesting startup called Motista and, by some accounts, is living a charmed life.He’s been a self-made millionaire since he was 18. That’s when he sold his first startup, a medical systems computer company. He founded it at the tender age of 15.
He dropped out college but was still hired by a wealthy investor to help run a hedge fund. And then, at his fiancee’s insistence, he went back to school and completed his degree in finance — in one year.
“They let me test out of a lot of classes,” he laughs.
They also turned around and hired him to launch the university’s incubator/accelerator program to help spin out faculty and student startups.
That in turn gave him the know-how to score $4.5 million in seed money from El Dorado Ventures for his latest startup Motista, a cloud service that helps marketeers figure out how to make their customers love them.
While his life seems like one lucky break after another (followed by hard work), he’s got advice on how any would-be entrepreneur can win over a VC:
- Keep your pitch really simple and to the point.
- Demonstrate how there can be a very significant return for investors — that your company can develop a “large market cap very rapidly,” he says. “In our case, I told them we have the opportunity to create a new market around emotional intelligence and to be the first to market with this.”
- Investors are driven more by “a per cent of ownership than by valuation,” he says. Be prepared to share as series A investors are “going to own their 30 per cent,” he explains.
- Don’t give up: sometimes a “no” has nothing to do with your idea. “I learned not to be deterred. I’ve walked into investors who have said they are not interested in funding things B2B,” he says. They were simply focused on other markets.