Startup Mentors: Investors? Why Now? Where? When? How To?
Startup Mentors can be the difference between a Startup succeeding or failing. Why then do so many Founders get this wrong?
Investors as Startup Mentors
One of the very best places to find mentors is within the ranks of investors who have already invested in you and your company. There are two main types of investors that (tech) startups will deal with. Angel investors. And venture capital investors. Angel investors by definition have access to high levels of disposable income. They might be a C-Level executive. They might own a business already but like to invest in other businesses. They might have started up a company and grown it so large that they have sold it – i.e., “exited”. Or they might be a partner of a Venture Capital Fund but also invest in their private capacity into founders or businesses they believe in. In all of the above scenarios, they have accumulated skills, knowledge, and a vast network. They know how to “win” at business.
==> The Money vs. Expertise – eBay
When Pierre Omidyar, creator of eBay approached Benchmark Capital in 1997, they were already quite successful. The platform was growing at an enormous rate and they had investors begging for them to take their cash.
They continuously declined the cash, since they didn’t want to sell a part of their company. Ultimately, they decided to accept Benchmark Capital’s money for one reason and one reason only: The knowledge of the partners.
Through Benchmark, eBay discovered Meg Whitman and managed to entice her away from a profitable position at Hasbro. She played an essential part in the business’s success.
Investors sometimes bring only money to the table. While money is important, it’s often not the most crucial thing.
When you’re picking investors, attempt to choose investors who can likewise bring something else to the table: Expertise. A Network. Verifiable Success.
Experience. If it weren’t for Benchmark Capital, eBay would not be what it is today. It’s not because of Benchmark’s money; it’s because of their know-how.
Where to find Startup Mentors
You’re most likely going to be looking for angel investors (rather than VC investors.) if you’re raising capital for the first time. You may also be taking a look at startup incubators.
Angel investors can be fantastic mentors, but can likewise be difficult to land. You require to truly have your pitch together. They’re not simply putting their time on the line, but their money.
Try to get included with regional angel organizations. Make pitches at angel events. Visit regional entrepreneurial occasions, such as talks by VCs or “Startup Weekends” to get noticed by angel investors who scout such occasions for startups.
Startup incubators and accelerators are another option. The best-known incubator is Antler. The “OG” of startup accelerators is Y Combinator. Other notable ones include Tech Stars, 500 Global, and The Founder Institute.
The incubator and accelerator world tends to concentrate on the tech scene, whereas angel investors support all markets.
An incubator is where you and several other startups all launch at the very same time. You’re all mentored together by a group of experienced entrepreneurs. They normally put in a percentage of capital and get a little share of the equity.
An accelerator takes in startups that normally have created something like a Minimum Viable Product (MVP) or wireframe and started marketing or selling to their target market.
In both cases, you can typically meet investors who’ll mentor you. Often investors who aren’t professional angels are simpler to land since they aren’t being pitched to all day.
Takeaway
To enhance your Startup’s chances of surviving, then thriving, and eventually launching onto the public market via an IPO, or being acquired by a large established company in your market, you need to attract and then compensate, mentors with domain expertise.
One of the best ways to meet potential mentors is through incubator and accelerator programs.
Once onboard as an Angel investor, these individuals will often react positively toward your asking them to become a mentor or advisor. Some will make this a pre-condition to investing in your startup in the first place.
About The Author
James Spurway is an Angel Investor, Mentor, Advisor, Speaker, former Commercial Pilot, and Author who specialises in raising debt and equity capital. He strives to model diversity, equity, and inclusion in the founders he agrees to invest and work with. He has paused his angel investing activity to focus on raising his first US$ 50M venture capital fund, which will invest in startups that can accelerate the achievement of net zero emissions. James spent the past 33 years living in Hong Kong, Vietnam, Germany, Switzerland, Monaco, the USA, Thailand, the Philippines, Singapore, and Australia, his country of birth. In that time, he started 10 businesses, exited from seven, shut down two, and kept one. He has invested in a total of 50 startups since 2001 and had six successful exits.