When taking on investment from professional investors, there are a few things you can do to make life a little easier for both parties. It's not just the data that matters in the investor-startup relationship. It's also the way you approach your growth and build the conversation.
To learn more about this approach, we invited Sara Myrenfors, the Investment Manager of Schibsted, a family of digital brands helping companies scale, to share the 5 things investors wish companies would improve. And it has given us a pretty unique perspective on what investors wish companies would change – and how you can rise to the challenge. Let’s jump right in.
Sara Myrenfors is a Stockholm-based investment manager at Schibsted with a background in business development and strategy. She’s on the lookout for venture opportunities for the company to invest in. Schibsted is a Nordic family of digital consumer brands with investments across media, online marketplaces, and technology ventures and mostly present in Norway and Sweden.
It’s not news that launching a startup is difficult. On top of that, finding an investor might be an even tougher nut to crack. It takes some heavy networking to find the right connections with potential investors. Networking will take you nowhere if your company lacks the necessary components to attract investment.
Here are the 5 key points Sara shared with us that investors wish startups could step up in their game:Honesty. As in every life or business situation honesty is crucial. It’s very important to have that type of relationship between the VC and a startup. It’s so much easier for a VC to help as an investor if you’re one hundred percent transparent. Also, giving continuous updates is a really important part of it in order to support the startup and to provide the right resources, or just more room to maneuver by being transparent and having everything intact.
The honesty between a VC and a startup goes both ways. Besides a startup being honest, open, and transparent about the processes, it’s also an important thing for VCs to let companies know when they’re underperforming or if they do see some rocky waters ahead.
“It’s good to be confident but you should also be humbly confident.”Process optimization. When you start your business, it’s common that you tend to do more than you actually need to. Always make the best use of the existing technology to speed up the process and automate, optimize your processes as much as possible. While growing your company, you will pivot a couple of times and redo stuff. Therefore, to minimize the workload, before you find a product market fit and know your total match, try to avoid unnecessary work. (Focus on what’s important!)
Prioritizing KPIs. This one’s important in multiple scenarios when it comes to projects and ventures – you have to focus on certain KPIs in the very beginning for a great takeoff. Make sure you know what really drives your business forward, keep the number of metrics low, and focus on the crucial ones. Look for the one true focus and strive to crystallize it. Clustered metrics will split your focus and not-so-important ones will receive more of your attention than they should.
Understanding limits. Find competencies that complement you. As an entrepreneur, you have your own superpowers, otherwise, you probably wouldn’t be an entrepreneur. Be conscious and aware of your limitations. Focus on your biggest strengths and find people that can complement and add up to them – whether it’d be sales, tech, etc. Stay on the lookout for people with their own expertise and set possible and viable expectations. In other words – be realistic.
Hedging for tougher times. It’s important to still keep it safe and be proactive to hedge for tougher times ahead – extend your runway to get room for action and unforeseen events. If it really seems to heat up, try to make smaller cuts. Restructuring is also an important part of maneuvering your business.
Sara also shared how these 5 things reflect in the investment thesis of Schibsted and how these topics can be seen internally within the investment strategy.
Honesty is the biggest point that stands out. Investing in the entrepreneur and his ideas include the understanding of what type of a relationship can be built and whether the transparency is mutual from the start. Schibsted invests in people, empowers trust and transparency throughout the relationship. The rest of the pointers go along the way along with the coaching and guidance later on in the VC-startup duo.
Learn more about Schibsted.
Check out full interview with Sara:
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