First of all, when you are looking for an investment, you have to be clear about what you want: are you thinking about self-employment or building a startup? That makes all the difference. Investors are looking for what has the potential to grow and (as the word “startup” implies) make it happen quickly.
Of course the idea has to be good, the project well structured, and the communication brilliant. All of this is important, but it is not essential for the investor. Sales are the ultimate proof. You can have a great pitch, and win prizes with that, but if the project is not validated and if the team is not competent, you will hardly find anyone willing to put money into your project.
Who chooses the investor is the entrepreneur. The investor has the capital, but whoever acquiesces the investor’s entry into the business is the entrepreneur.
Never expect from an investor just money. Look for a sales helper, opening doors for new business; or a mentor, to help you grow and consolidate your company. Well-connected investors with a good internationalization network are worth much more than the money they put into your project. It is called “smart money”, money that is worth for the company to grow.
Looking for investment implies strategy and planning. You need to know what you need the money for and who you are looking for as an investor. Sometimes a partnership can be better than an investment.
A good tip: Never look for desperate money, you run the risk of being forced to accept what you do not want. Remember that there are good investors and “predators” that will make you employed.
Notes from the lecture by Tiago Vargas in the first edition of Digitagy Talks
Tiago Vargas holds an MBA from Manchester Business School and has a master’s degree in Civil Engineering from Instituto Superior Técnico. His extensive international professional experience includes European, African, South American and Asian clients, having lived in the United Kingdom and Angola. He is currently the managing director of a fund of Business Angels and Venture Planet, which is a Venture Builder and raises capital for startups.