Startups: a story of fear and greed.
Let’s put the obvious aside: all entrepreneurs want to change the world, but -apart from a few social entrepreneurs- most of us don’t ONLY want to change the world: we want to change the world AND improve our bank account in the process!
That’s also what motivate investors in our startups. But investors differ from entrepreneurs on one fundamental point: risk. Entrepreneurs bet their house on their idea, whilst investors will try and hedge their bets.
I’m always surprised when talking to people considering founding a startup that many think they can have it both ways: have a day job and a normal income on one hand and be a start up founder on the other. In my experience, these founders do not go long and far — the successful ones go all in.
And that’s also what investors require: skin in the game. Yes, they want traction, but the flip side is they ALSO want to know you’re motivated and what’s more motivating than the fear of losing your house?! Your idea is only as good as the team driving it.
So here is my tip, prepare and plan as much as possible to improve your own level of confidence that your idea is going to change the world and your own life; do that as safely as possible, but don’t try and raise funds at that stage. Then go all in: quit your job and put some money in the venture yourself. Now is the time to go and pitch.
Sure there’s lots more to be done to increase investors confidence, but skin in the game is almost always a prerequisite.