Top Tips For Start-Ups Seeking Investment
From start-up to scale up, Blackfinch Ventures specialises in and focuses on investing in early-stage tech companies. Investing in the UK’s most innovative new firms, we support disruptive businesses, offering products that address real world needs, with the capability to make an impact in global markets.
As the team continues investing, Ventures Director, Dr Reuben Wilcock, discussed his top tips for start-ups looking for investment:
- Ensure a deep understanding of your core Value Proposition
In a nutshell, your core value proposition defines the reason a customer will pay money to use your product. A great idea alone is not enough if the value it creates for a user is low. So, ensure that you can clearly link the benefit that your product or service creates to a genuine customer pain point or need. Articulate this proposition in the simplest possible way, describing the problem, the product or service you offer and the benefit it brings.
- Iterate and evaluate your Minimum Viable Product
A minimum viable product (MVP) should offer the bare minimum to test a key hypothesis about your value proposition. Deploying an MVP to warm customers allows you to quickly test your assumptions, iterate the product and move forwards, guided by their feedback. Software companies should aim to regularly test new features and changes, evaluating these through specific tests to ensure continuous improvement.
- Have a passionate drive towards Product Market Fit
Product market fit is the holy grail of early stage start-ups and defines the point at which the value proposition finally clicks with your customers. Early stage start-ups nearly always think they have product market fit before they really do, which can be frustrating for investors. Every start-up should track key metrics, ideally building a dashboard showing these. You’ll know when you have product market fit as all your metrics will suddenly start pointing in the right direction.
- Demonstrate real Traction
Once you have genuine product market fit you’ll start to see real traction with users. Your tracked metrics will be heading upwards strongly, and you’ll notice that more of the doors you are pushing on are opening. This traction will likely be reflected in growing revenue, which is precisely the evidence you should be bringing to investor meetings. Showing us your metrics and evidencing this through real revenue will help to ensure that we take your opportunity seriously.
- Aim to disrupt Big Markets
At Blackfinch, we’re looking for start-ups with innovative products or services that are aiming to make an impact in big, growing markets. Even if you have an incredible idea, the odds are stacked against you if there are only 100 people in the world you can sell it to. Conversely if the market is huge, and seeing significant growth, success can be achieved with just a small market share. So make life easier for yourselves and aim big.
- Build a lean Effective Team
The earlier stage a start-up is at, the more its success will hinge on the quality, drive and passion of the team. All start-ups will hit roadblocks along their journey and when this happens it’s the strength of the team that will allow you to pivot, adapt and evolve. Keep searching for the best people – it’s much better to get a few hours from a single person who has real superpowers than a lot of time from a mediocre team. Some of the best start-ups we have seen have been created by just a handful of exceptional founders.
- Have your Pitch Deck ready and be prepared to send a Financial Model
At Blackfinch we need to see your pitch deck and financial model before we’ll consider inviting you in to pitch. We like decks that lay out the problem clearly, covering solution, progress, competition, team, market, traction, and unit economics. If you make it past our internal filtering stage, which takes a few days, we’ll ask for extra information. We like companies who respond quickly to these requests as it means they are probably responding quickly to their customers too. We have a rigorous but very efficient process to analyse new opportunities which means founders can spend less time raising funds and more time focusing on how their company can make a real difference in the world.