Shan Shanbhag, Ph.D.
Mentor and Business Development Advisor
In case you are wondering why it is so difficult to secure funding for your startups from investors, first you need to know what business they are in and why. The answer to both is “they are in the business of making money”. They strive to achieve that by “managing risks to increase their ROI.” They are hoping for 10x or 20x returns and sometimes, dream about unicorns too.
While you are Pitching, they can figure out within a few seconds, whether they are wasting their time. Please stay away from your hockey stick projections.
Here are a few things all Entrepreneurs should be prepared for:
- Mastery of most of the major numbers (revenue, number of employees, cash burn rate, cash runway, current debt, MRR, ARR, LTV, CAC, funds needed- purpose and time frame; to name a few!)
- In depth knowledge of the domain/sector/industry, market trend and your Business Model.
- Ability to communicate the product benefits in an extremely clear and concise manner. Your solution should be the simplest anyone can offer.
- Impressive understanding of buyer psychology and their buying-decision making process.
- Demonstrated resourcefulness (you are spending their money!)
- Appropriate understanding of what a healthy company/investor relationship looks like (you two need to get along for at least the next 3-5 years!)
- Having an encyclopedic knowledge of each competitor- direct and indirect. You need to demonstrate a sustainable competitive edge.
- How will you deliver the “Team” slide? They value your Team more than your Business Idea!
- Impressive forward-looking growth projections based on sound assumptions.
Now you know why a startup is a treacherous journey. It is like climbing Mt. Everest.
“Be The Master of Your Numbers.”
Enjoy Your Business-Journey.
About Shan Shanbhag, Ph.D. – Business Sherpa
“Guiding Businesses of Today to Meet Their Customers’ Needs of Tomorrow.”
Shan has been a Business Sherpa since 1994, guiding startups, small- and mid-size businesses through challenging terrains toward their vision, mission, and goals. He helps founders and their teams to innovate and implement through collaboration.