For any startup, securing capital and investment is everything. Not only does it mean somebody believes in your idea, but also that they’re willing to bet on it.
Startup investor Gordan Glasfurd, Managing Director of GIA Capital Solutions, says a great idea is only half the story.
“When Adam Friedman from Ampifier approached me, I said ‘go away’ – there’s no way I’m going to invest in this sector. Because technology, for some and for me, tends to be seen as the ‘dark arts’. But the reason why I ended up backing Amplfier, and why I’m now backing businesses in this sector, is because they’re providing real IP, and a real solution,” Glasfurd says.
Glasfurd says that he has a number of other companies knocking on his door, and that he is someone who really ‘kicks the tyres’ before being deciding to back a startup.
“I’m an investment banker, and principally whether it’s a debt or an equity deal – we do financial due diligence on the company and the individuals behind it. There’s no part of the equation that escapes the due diligence process,” Glasfurd says. He adds that it’s not just the quality of a business plan – it’s the quality of the leadership as well.
“What I do is identify not just the business, but also the people. I’ve ridden the rodeo for a long time, and if you give me a great business that’s really ‘wow’ but with really average management – or an average business with people of great character, I’ll take the average business any day,” Glasfurd says.
Renata Cooper, CEO and founder of ethical and social investment company Forming Circles, believes a critical element of any business plan is the exit strategy.
“The world is full of amazing ideas, but if they can’t execute it and don’t have a clear vision, there’s no way it’s going to be successful. It’s critical to be able to showcase the model of exactly how the idea is going to make money, and there needs to be a very clean exit strategy,” Cooper says.
Alongside the exit strategy, Cooper says the passion and vision of the leadership team is everything.
One startup that knows how to sell themselves is Spotjobs. Co-founded by Lewis Romano, 26 and Jake Williams, 25 in 2010 – their jobsboard website for entry and mid-level jobseekers has attracted funding from some of Australia’s most well know investors, including the Simonds and Smorgon families.
Williams told Dynamic Business that he believes knowing your identity as a business is integral to a great pitch.
“It may sound simple, but it’s so important to communicate how you’re an alternative, what you do differently, and what you do better, rather than what’s already out there in the market,” Lewis says.
“For us it was all about presenting our business case, and knowing our identity before going into the market. It’s also got to make sense to anyone regardless of whether you’re in IT or not,”
While Lewis won’t disclose precisely how much they received in investor dollars, it has been enough to allow Spotjobs to open a second office in Sydney with ten staff across its two offices.