INNOVATION
105
Dan Cobley
Matteo Rizzi
What are the first things you want to know about a start-up before you decide to invest? First, are they in a space we want to be in? And for us that means can we materially add value, beyond money, to their chances of success. Second, what has motivated the founding of the business? We are much more attracted to a company that is trying to solve a customer pain or address an injustice than one that just sees an opportunity to make money. Third, who are the team? Are they people we want to work with, who are smart enough to set a clear agenda and humble enough to take advice? Fourth, are they at the right stage? As venture builders, we come in at the beginning where we can add the most value.
What are the first things you want to know about a start-up before you decide to invest? The way start-ups introduce themselves is pretty standard. We need to know what problem they’re trying to solve, what the solution is, the market size, route to market, their strategy, who’s in the team and whether the idea has traction.
CEO and Co-Founder of Brightbridge Ventures (London)
What kind of experience are you looking for in an executive team? Experience is less important than skills, attitude and ideas. I’m looking for a great business brain with a clear vision to solve a problem, and a technical genius who knows how to build the technology to support doing it. They don’t need decades of experience, but they do need to demonstrate that they really understand the problem space they plan to address. What is more important to you – the start-up’s product or the team? The team is most important. A good team will morph its product based on new learnings - usually many times between idea and launch. It’s harder to morph the team. Is there anything that would put you off in a pitch? Waffle. Bullshit. Complacency. What areas are you interested in investing in at the moment? Fintech ideas that will solve major consumer and SME pain points in new and novel ways, especially in the credit and lending areas. What tips do you have for start-ups looking to get funded? Research the VC you are approaching and make sure what you have meets what they want. Most will say a lot on their website, in interviews and in public presentations about what they are looking for. Show that you have done your research and that your sector, space, size, maturity and the like meet what they like. If you do not tick all their boxes, then explain why that’s not a problem. If the VC thinks you have been lazy in your approach, or worse still, you are doing a blanket mail merge, they will reject you cold.
General Partner at SBT Venture Capital (Brussels)
What is more important to you – the start-up’s product or the team? While I’m not saying that team is more important than the product, it’s true that if the team is good, they’ll be able to adapt the product to the market. There are many cases where the product that you invested in is not the product that leads the start-up to grow. So you need a very reactive, knowledgeable, held together type of team. What kind of experience are you looking for in an executive team? It depends on what start-up we’re talking about. Start-ups who are working with financial institutions need to know how a bank works. Having a network – the ability to link yourself with the market – is also important. Start-ups who link themselves to the market find it easier to get a mentors, which means they’ll sell their product better, and are more likely to be called on to speak at conferences, which is free marketing. Founders who have experience in a start-up is something we value a lot. Being multi-skilled is also important. One of the main reasons start-ups fail is because they can’t manage their money. It’s important for a startup’s group of founders to have skills across the disciplines, including management, creativity and finance. Is there anything that would put you off in a pitch? The lack of personality and clarity in a pitch turns me off immediately – I like to understand what the start-up does within five to 10 seconds. Single founders put me off because they’re not as resilient. Finally, start-ups that are a solution looking for a problem put me off: if you’re a solution looking for a problem, you’re probably still waiting for the first customer to come. What areas are you interested in investing in at the moment? I think the time has come to start investing in alternative banking models. At the moment, the UK is the flagship of this new idea, but we are looking at them closer. What tips do you have for start-ups looking to get funded? Try to be original. If you don’t know the investors you’re pitching to, try to be original in the way you approach them. If you start from scratch, the best way to get your start-up visible is to set up in an incubator or co-working space. It’s not worth taking an office or building a start-up in the garage anymore.