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Las 6 claves para emprendedores que buscan inversión seed – early stage

The six keys for entrepreneurs seeking seed – early stage investment

13.05.2019 256 veces
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The six keys for entrepreneurs seeking seed – early stage investment

Last 2 April a new First Tuesday event was held at Nuclio Digital School Barcelona intended to settle any doubts of new entrepreneurs seeking the first investment for their project. To this end the event was attended by Marta Campillo, Program Coordinator and BStartup10 Analyst of BStartup; Artur Bardera, Venture Associate of Abac Capital and Mario Brassesco, Investment Associate at Encomenda Smart Capital.

Take note of this because below you will find six key tips which these three experts in investment shared with Carlos Blanco and the audience, as basic rules that any new entrepreneur must bear in mind when looking for investment in the seed- early stage phases.

 

1) A sound team

The team is one of the vital foundations which investors have their eyes on, and is a key matter to decide whether a project has a future or not. Having a forceful and versatile team with experience and energy to develop the project is one of the  essential aspects involved in obtaining investment in the early stages, as pointed out by all three experts.

To set up your working team perfectly you need to have in-depth knowledge of the nature of your company and realise what profiles are vital in your sector. This will enable you to set up a complementary team with different profiles to suit the company that you are developing. Depending on the type of business model that you are implementing you’ll have several essential profiles in the team.

 

2) The market and the moment

The market on which your project is being launched will be a key point for appealing to the investor. It will be hard to achieve your aim without having a big market with great growth potential and with a good project behind you. But the market is not the only thing that matters. As the investors at this First Tuesday event quite rightly stress, it is currently essential to know how hot the market which you are tackling is; that is, the moment: knowing whether your project is in fashion. “If you can see that the major international VCs are focussing on a specific sector and you are shown a project for that sector to examine, you’ll look at it in greater depth”, points out Brassesco.

The thing is, as Carlos Blanco asserts, when one talks of trends you are talking about statistics: “if investments are taking off in Health Tech in the United States, we know that in 6 or 9 months that will be the leading investment sector in Europe”.

 

3) An appealing business model

The business model is very much in line with the market. The success of our project involves building an appealing business model which manages to meet a real need, with a sound, feasible value proposal that is sustainable over time.

It is not just by chance that investors are looking for businesses with potential for scalability and becoming big companies.

 

4) Take care of your business introduction

Knowing how to interact with the investor for the first time is vital to accomplish your goal. Before meeting you in person, the investor is nevertheless likely to have tried to find out a little more about you and your team. Take care and set up the  slide on your team in your Power Point and above all your Linkedin with painstaking attention to detail.

“If a project is referred to me by someone I can rely on, I go directly to the Power Point. If it is someone I don’t know the first thing I look at is the LinkedIn to get to know that person’s history.”

Where you have worked, with whom, your recommendations, your duties at each company, your skills, links to your other social networks such as Twitter or your contact mail will help your investor to decide whether he or she wishes to go on finding out more about your project or if on the other hand they decide to reject this automatically. As the investors on the panel affirm, this first search manages to rule out around 70% of projects.

 

5) Does it matter where you are?

According to the Startup Ecosystem Overview 2019  report, Barcelona and Madrid come forward as leading hubs in the European panorama as regards the number of startups.

“The great majority of operations are in Barcelona and Madrid, but we can get huge surprises in other areas”, points out Campillo. “In our case the majority of the deal flow is in Barcelona, Madrid and Valencia, but we have network acting all over the country because opportunities can come from anywhere at all. At BStartup we are furthermore in contact with accelerators from all over Spain to detect opportunities and look proactively for good projects”.

So although Madrid and Barcelona may be seen as the innovation hubs par excellence in Spain itself, all the investors from the panel agree that this is not a key factor for obtaining financing. Investment funds are increasingly extending their gaze to other parts of the country where talent and good projects could be accumulating.

 

6) Starting from scratch

If you are an entrepreneur who has never had investors, it is important to take certain steps which will enable you to firmly establish your project from the beginning as regards the financing phases.

“The first will be the entrepreneur him or herself when the company is incorporated, the commitment displayed with his or her contribution. “Closely linked to there is also the matter of being full-time or part-time. We are often presented projects where the team is not involved full-time, which vouches for little commitment”. This is one of the main reasons for ruling out a company for the seed investors on the panel.

“After the money from the investors will come the bootstrapping as from the actual development of the company and the customers if the company already has these”, says Campillo. The famous Family, Friends and Fools would also come into play. As regards FFF, there are certain aspects that your investors are going to detect: “It is interesting to see that an entrepreneur has set up a company and one of the persons in the cap table, for example, is his ex-boss, which says a lot about this entrepreneur”, explains Campillo. “Your network of contacts and the ecosystem in which you move is important: investors will be careful to see if you have a good network”, says Bardera. “This kind of initial conduct says a lot about how the entrepreneur is going to evolve in the future”, Brassesco concludes.

Later on, and before calling at the door of private investment funds, investors advise working on public financing. Brassesco says that “it is also a good idea to include a mix covering small funds which can help you along and Business Angels specialising in your business model who can advise you with their own experience”.

“You should also know how to choose your partners. A startup will find more than equity in BStartup. BStartup is Smart Money, as we are constantly backing the company through strategic level business advice and in defining their route map. We also give them support in the fundraising strategy, introduction to some of the most relevant investors for their state and activity, as well as advice in preparing the documents required to prepare an investment round (business plan, investor’s deck and one-page summary).”

Get the full First Tuesday session with the keys for financing startups in early stages along with Marta Campillo (BStartup), Artur Bardera (Abac Capital) and Mario Brassesco (Encomenda Smart Capital) thanks to F.Iniciativas.

About BStartup

Every year we invest 1,000,000€ in at least 10 startups in seed or early stage  phases, up to 100,000€ per project, in exchange for a stake in the share capital. The companies get capital and personalised support which will help them mainly to develop their market and go on to the following rounds.

BStartup is seeking to invest in companies which comply with the following criteria.