If there’s a certain kind of founder that every investor would like to avoid, it’s the one that goes through round after round of funding without ever setting up a business that can’t generate revenue. In other words – the founders who consider themselves to be absolutely bulletproof. Now when you consider the startup and the scale-up ecosystems, the most evident aspect stands out to be the emphasis on the prizes, awards, competitive grants etc. It’s disconcerting to see so many people caught up in a struggle with recognition at its center.
It can be argued that some of these programmes have their advantages in the form of inspiration or from lauding success. But, more often than not, behind the smiles and the pose with the trophy is a founder who is, in fact, stressed anxious and desperately attempting to make his/her business work. It’s not uncommon for founders to find themselves feeling alone, quite hopeless and short of friends in their seemingly singular struggles. These experiences put extra pressure on them to appear bulletproof. This facade, however, doesn’t always go down well with the investors.
Investors like to see honesty in the founders. They like to hear the struggles, the pain-points, the blood and sweat stories they have been through. Tell them about your team, your mentors and they’d be more than willing to lend you help.
There should be no doubts about this one. Investors look at the founder’s history. Color’s founders secured their funding based solely on their reputation of success in their previous outings. While it’s a different matter that Instagram completely stole the show and contributed to Color’s downfall, securing $41 million funding is no joke. We can be quite sure that any other founder with a similar idea would have struggled to come close to securing a similar fund.
All successful relationships are based on trust and trust is the fruit of authenticity. Share your identity, truths and all the tough paths you’ve trodden with the investors. They’d be more willing to trust you. Any founder trying to sound aloof is simply shooting themselves in the foot. If they can’t be honest about themselves, investors have enough reasons not to entrust their money with them.
You might be deluded into believing that investors are all the time looking for people with a successful track record but that’s not always the case. Investors are looking for what you’ve learned from all your experiences, whether good or bad. Failures are only bad if you simply push them under the carpet without taking them as a learning curve. Show your investors what your failures taught you and you’ll have convinced them a long way into securing the necessary funds for your business.
The founder with a growth mindset is always looking to improve and is, therefore, an ideal candidate to invest money in. On the other hand, the founder with a fixed mindset is always looking to prove their potential to others and inadvertently assumes a bulletproof mentality. They are kind of founders, investors are always wary of. The key thing here is the intent. If your business were to fail, the investor would want to make sure that you made every effort to keep it alive, as opposed to simply letting things take their course.
In conclusion, we can assert that trying to appear bulletproof to the investors is outright foolery. Investors pretending to have all the answers up their sleeves are self-delusional and least trustworthy. Founders need to be honest and have their feet on the ground. The sooner you let the investors know about your troubles, the more confident they’ll be to trust you to use their funds wisely. Hiding what isn’t working until the inevitable doesn’t do any favours to either party.
Now, one can’t hide away the startup ecosystem where the great and successful founders are put on the pedestal with a presumably bulletproof identity. While some of them really inspire confidence and wear the successful, impeachable masks quite stylishly, the fact remains, everyone has weaknesses and it’s better to be honest about them, not least when you’re dealing with people who may invest in your business idea.October 16, 2018