Serial investor Magnus Kjøller receives more than 500 cases annually, and in many cases has founders an unrealistic view of their own business when they apply for capital. Entrepreneurs must remember to maintain humility when they come hat in hand and ask for others people's money.
A good pitch is important when you are seeking funding for your business, but a bad pitch can quickly become the end of a possible investment. Magnus Kjøller, who has invested in more than 50 companies, tells here what not to say to an investor at the first meeting, if you like will keep the dialogue going.
“It can't go wrong”
- Most startups fail. So yes, it can easily go wrong. Present an interesting case with great business potential, but be realistic and back up your announcements with data. Is there "proof of concept" or not? Most investors know that projections are not guarantees, and they must be based on rational and verifiable assumptions, says Magnus Kjøller.
"We have no competitors"
- Investors can quickly see when entrepreneurs are being unrealistic. Any
viable company has (or will have) competitors, then if they don't exist, the product is either a bad idea, the market has not yet been developed, or the entrepreneur has not done his homework, says Magnus Kjøller.
"I need a director's salary"
- As an investor, the red lights really flash if the founder budgets with a giant
hire already before there is turnover and the product has come off the ramp. We
does not invest in a company with the potential to pay an excessively high salary to the founder from day one, says Magnus Kjøller
"We need capital - not your help"
- As an entrepreneur you should be open to the inputs and the experience a potential investor comes along. The partnership can create value on several fronts in addition to capital, that is only part of the puzzle.
- At Kjøller, we invest with capital and know-how. We are entrepreneurs ourselves and we bring would like to bring our skills and network to the table, without interfering unnecessarily in the operation at our portfolio companies, says Magnus Kjøller.
"We don't know our unique selling points yet"
- There is competition in the market. The question is why you are unique and how you differentiates you from the competition. Why is your team, your business process, your product and your service better than the others? You must know that, and you must be able to sell it externally quite concretely, concludes Magnus Kjøller.
Kjøller is not industry-specific and has ownership in 30 portfolio companies both in Denmark, England and India, which collectively employ more than 700 people. Do you have an exciting company, and if you are looking for growth capital, send your case to Kjøller.
Rhis blog has been translated by Startup Central.
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