At the Ohio Innovation Fund, we’re dedicated to advancing Ohio’s entrepreneurial ecosystem. Throughout the day-to-day, our partners are meeting with founders, innovators, entrepreneurs, investors, and everyone in between, answering questions and giving advice to the people who ask for it. In our From The Trenches series, we aim to answer questions and give advice about how to build a company, gain the support of investors and partners, and more. Send us your questions via email or our Twitter.
Q: I can’t secure funding… what am I doing wrong?
A: There are a lot of founders who look at their business like it’s their baby–and nobody wants to tell someone that their baby is ugly. Because of this, investors may make up “excuses” for why they don’t want to invest.
When we’re deciding whether to invest in a company at OIF, we may say that a company doesn’t have ample intellectual property, customer adoption will be too difficult, it’s too niche or it’s a “nice-to have” rather than a “must-have.” Then, we’ll try to work with them on their offerings to address these issues.
If you can’t secure funding, look in the mirror, and be honest with yourself. Ask yourself if you have these four things nailed down before meeting with potential investors:
- In one to two concise sentences, be able to say why what you’re doing matters. This includes solving a major pain point (this is a must-have, not a nice-to-have) and the highly differentiated nature of your offering.
- Do you actually have the background and expertise to do that you’re saying? If not, you may need someone else to run your company or need to build out your team with more expertise in key areas that are lacking.
- Look at your presentation. Do you directly hit all the the key points up front? This includes market pain, solution, team, competition, growth, market validation and more. Investors see many potential investments every week, and since they only have so much attention to give, you need to convince them in the first 10 minutes that this is a big opportunity.
- Are you putting up red flags? Unreasonable valuations, non-voting stock, a CEO with no management experience but an expectation to lead the company forever are all potential concerns.
—Bill Baumel, managing director at the Ohio Innovation Fund