I’ve spent many years studying the different characteristics of successful startups and companies. As an angel investor and investment mentor, my objective is always to see startups grow from its infancy into a fully-fledged and successful business concern, and I’ve long been fascinated to understand why some are successful whilst others are not. My conclusion is as simple as: it has to start in the proper way.
The foundations for what I’ll call your start up skyscraper are particularly important. Lacking them from the beginning, it will be infinitely more difficult if not impossible to put them in place afterwards. In an effort to classify these foundations in a an easy to remember framework, I’ve distilled my experience and divided it into the principles of my ANGEL Methodology in which the 5 sequential elements build upon each other.
Acquire mind-set
Having the right mind-set will ensure that you never close yourself down mentally and are open to moving forward on and upwards. You’ll welcome constructive feedback and not shy avoid it. You’ll always want to be open to the needs and changing demands of the market, to honest advice from your mentors and being comfortable with your competitors. You’ll always keep a keen eye on market conditions and situations as they change around you, so that you’ll be best placed to spot and take advantage of the right opportunities the moment they present themselves. You’ll always be willing to go beyond your comfort zone in the knowledge that you’ve surrounded yourself with people that are aligned to you, your vision, mission and values. To that end, you’ve clearly established the right values for yourself as a person, for your product and for your company that will point towards the ultimate goal you want to achieve.
Navigate business basics
This may seem obvious to anybody who is in business and its importance is implied at every turn. Every investor knows that at an early stage, a startup can’t possibly provide cash flow projections such as to be solid basis for a valuation of the business. At best, they provide an often too rosy guess-estimate.What do angel investors, such as myself, want to see in addition to your guesswork? We want to be confident that you’ve the ability to work your numbers, that you understand the importance of the ability to read the numbers related to your business, that you’ve created a solid business model based on business foundations that go beyond the immediate perception (and which will include all elements of this ANGEL Methodology).
Generate branding
In today’s super connected and over communicated world, the value of branding cannot be underestimated. It doesn’t happen by chance, it’s a vital, integrated element that requires dedicated effort from the very beginning. There’s no escaping it, especially when you’re what Google says you’re. With that in mind, you as a founder, and what your product stands for, must be managed from day one. You need all stakeholders to see you for who and what you really are, that you’re sincere, transparent, and especially that you’re aligned with what the product is meant to be. There’s no room for errors of judgement or where online posts about you can be misread, or misinterpreted. Remember, what the world at large sees about you, so does the investor, who will look at everything there’s to be seen. Therefore, the branding has to be generated properly from the beginning and must be managed constantly.
Execute marketing and sales
There are different stages of funding, as we will see in the section dedicated to it. However, as a general rule, before asking for financing, you need to show that you’ve a marketing plan in place, both for digital and traditional execution. Not knowing how to sell your product casts your proposition in a very bad light and suggests to an investor your idea might be one of the 90% of startups that may eventually fail.
Line up funding
Only now, after you’ve worked your way through steps 1-4 of the methodology, can you even think of talking to investors. The relationship with your investors is at times likened to a marriage, and so requires effort, time and strategic planning. Nothing should be left to chance!