Why founders should invest in personal branding – and three ways to get started

At first sight, personal branding might seem mystifying – maybe even a little narcissistic. This is especially so if you’re a first-time startup founder, driven by the all-consuming challenge of launching your product, building your team, and attracting your first customers. With an endless to-do list, the task of elevating your own profile probably won’t…

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EU-Startups

Crista Galli Ventures launches new fund; will invest at Seed and Series A in pan-European healthtech startups

In today’s world, technology has become deeply intertwined with the medical industry. As healthcare solutions have to work for patients from all walks of life, it is essential to encourage the use of new products and technologies. In an attempt to help healthtech companies come up with such solutions, Dr. Fiona Pathiraja has launched Crista Galli Ventures, a unique venture capital fund that intends to revolutionise healthtech investing in Europe.

Early-stage healthtech fund

The former NHS radiologist, Dr. Pathiraja claims that healthtech investing is quite different from traditional VC investing, which forces companies to meet unrealistic timelines; that could spell bad news for patients. Understanding the significance of empathy in healthtech, Dr. Pathiraja and the team behind Crista Galli Ventures focuses on it.

The early-stage healthtech fund offers patient capital, along with healthcare expertise. It claims to partner with early-stage founders at Series A and Seed stage to come up with world-leading companies. The healthtech fund has customised its strategy to the requirements of aspirational entrepreneurs in the industry. It will invest in healthcare solutions that focus on deep tech, digital health and personalised medicine. And, CGV will not invest in drug discovery or biotechnology and will also steer away from devices, especially when they are non-software enabled.

Furthermore, CGV has also launched Crista Galli LABS, which intends to bring greater diversity in the industry by supporting founders from underrepresented backgrounds in their initial stages. Crista Galli Ventures operates with offices in London and Copenhagen. The firm has already invested in 15 companies such as ContextFlow, Skin Analytics, and Quibim.

As Founder Dr. Pathiraja explains, “In the medical industry, tech was once seen as the poor cousin of research and medical education. But that’s changing. Case-in-point, the Lancet and the New England Journal of Medicine both now report on digital innovations. The sector is coming to recognise the critical role that healthtech can play. Now is the perfect time to build the solutions that will shape the healthcare industry for decades to come.”

How’s it unique?

Dr. Pathiraja believes that Traditional VC fundraising cycles don’t typically work for healthtech startups faced with a complex and highly-regulated market. “Young companies are often expected to adhere to timelines that don’t acknowledge the realities of building a company in the healthcare industry. Crista Galli Ventures provides a better solution – the ability to make agile decisions, while thinking long term.”

Talking about traditional VCs, they need to return money to their investors and can begin to realise the investments only after five years following which they get returns. However, the healthcare industry works differently. It might take longer to arrive but will be successful in the end. It is important for healthtech investors to be empathetic and patient.

According to Crista Galli Ventures, unlike typical VC firms, it’s structure lends itself to this. As a single investor fund, the firm has the opportunity to grow internally without the need to fundraise.
It claims to be free from the usual five-year fund cycles, thereby allowing it to be flexible and focus on a longer time horizon – benefiting patients, companies and investors.

Crista Galli LABS: An insight!

Crista Galli LABS is a standalone investing strand, which lets CGV to invest in pre-seed startups. Besides the investment, these companies will have access to coaching and mentoring from the CGV team. At least 50% startups that receive Calli Galli LABS investment will be led by exceptional founders and help them secure later-stage funding, claims the firm.

“As a healthtech investor, we noticed a stark lack of diversity on both sides of the investor/founder table. The overwhelming need for an elite education in deep tech (MD or PhD) means that those from more diverse backgrounds are often excluded,” explains Dr. Pathiraja.

Main image picture credits: Crista Galli Ventures

The post Crista Galli Ventures launches new fund; will invest at Seed and Series A in pan-European healthtech startups appeared first on Silicon Canals .

Startups – Silicon Canals

Stockholm-based scaleup Klarna lands €547 million to invest in its “smoooth” shopping experience

Swedish scaleup Klarna, a leading global payments and shopping service, has announced it has raised around €547 million in an equity funding round, at a post money valuation of around €8.9 billion. This ranks Klarna as the highest-valued private fintech in Europe and now the 4th highest worldwide.  The fresh funds will help Klarna further…

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EU-Startups

Dawn Capital raises €333 million to invest in B2B software startups

Today Dawn Capital, one of Europe’s largest venture capital funds dedicated to B2B software, today announces the closing of its fund Dawn IV at the hard cap of €333 million. The fund was oversubscribed and closed within six months of launch, after receiving strong support from existing investors and attracting new investors from the US,…

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EU-Startups

Snowflake’s IPO could value it as high as $24B, Salesforce and Berkshire to invest

On the heels of new filings from both Sumo Logic and JFrog, Snowflake, a venture-backed unicorn looking to go public on the strength of its data-focused cloud service, set an initial price range for its IPO.

The $ 75 to $ 85 per-share IPO price target values the firm at between $ 20.9 billion and $ 23.7 billion, huge sums for the private company. Its IPO could raise more than $ 2.7 billion for the startup.

Snowflake was last valued at around $ 12.5 billion when it raised a Series G worth $ 479 million earlier this year.

Built into those valuation projections are two private placements of stock in Snowflake, $ 250 million apiece from both Salesforce, the well-known CRM player, and Berkshire Hathaway, better known for its investment returns in the 80s and 90s, Cherry Coke and Charlie Munger’s humor.

Jokes aside, the inclusion of Salesforce in the IPO is notable, but not a shock, but Berkshire taking part in the public market debut of Snowflake, a company with historic losses that are nigh-tyrannical, is.

Here’s the S-1/A text on the setup:

Immediately subsequent to the closing of this offering, and subject to certain conditions of closing as described in the section titled “Concurrent Private Placements,” each of Salesforce Ventures LLC and Berkshire Hathaway Inc. will purchase $ 250 million of our Class A common stock from us in a private placement at a price per share equal to the initial public offering price. Based on an assumed initial public offering price of $ 80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, each of Salesforce Ventures LLC and Berkshire Hathaway Inc. would purchase 3,125,000 shares of our Class A common stock. […]

In addition, Berkshire Hathaway Inc. has agreed to purchase 4,042,043 shares of our Class A common stock from one of our stockholders in a secondary transaction at a price per share equal to the initial public offering price that will close immediately subsequent to the closing of this offering.

That second paragraph makes it clear that Berkshire is actually looking to snooker even more shares into its corner, for a total purchase price that might scale to more than $ 500 million.

What is so attractive about Snowflake? TechCrunch wrote a bit about that when the company filed, but the short gist is that it has epic growth, improving gross margins and dramatically curtailed losses. The package adds up to one valuable IPO, and something durable enough to tempt Buffett.

Regardless, what could be the most highly valued IPO of the year — Airbnb depending — here in America just got a lot more exciting.

Startups – TechCrunch

Why Won’t An Investor Invest In Your Startup?


why won't an investor invest in your startup

While TV shows portray the startup investments to be fun and games, it’s the total opposite in reality. Sometimes, scoring an investment proves out to be more difficult than actually starting up. And often, not being able to score an investment ends up a startup.

Statistically speaking, only 0.91% of the startups get their funding from angel investors, and only 0.05% succeed in getting Venture Capital funding.

But what makes it so hard for startups to get investments? What do these startups or entrepreneurs lack?

Well, here are 13 reasons explaining why investors won’t invest in your startup.


Your Company Doesn’t Match Their Portfolio Or Interests

If you don’t already know, let me break this to you – investors won’t usually invest in a startup they can’t associate themselves with.

Most of the time, founders fail to even get meetings with the investors just because of the same reason.

Angel investors have their interest segments, and venture capitalist firms have their portfolios. You need to make sure you’re approaching the right investor who’ll be interested in the niche you operate in.

You go for investors who – 

  • Have invested in a startup of a similar niche before.
  • Belong to a similar niche or has some experience in the same.
  • Have profited from previous investment in a startup of a similar niche.

You may try not to spend much time on wooing investors who – 

  • Got burned by a previous investment in a startup of a similar niche.
  • Doesn’t belong or have experience in the identical niche, or
  • Hasn’t investment in a similar niche


You Have Come For An Investment A Bit Too Early

A usual startup witness six stages in its lifetime –

  1. Ideation
  2. Testing
  3. Traction
  4. Refinement
  5. Scaling
  6. Establishment

Every stage witnesses its own type of investor –

  • Family and friends at the ideation stage
  • Credit or crowdfunding during the testing stage
  • Angel investors during traction and refinement
  • Venture capitalists during scaling
  • Corporates when established.

If you reach out to big investors during your startup’s initial stages (without any traction), chances are that they’ll turn you down.


Your Numbers Aren’t Enough

Sometimes, the investors’ expectations are different from the actual business numbers, which results in them turn down the deal.

Sometime, this happens because the businesses choose the wrong investor to pitch to. Suppose your startup has a worth of $ 1M. Now, this may seem huge. But for a venture capital fund of $ 1 billion, it may be too small for an investment.

Another reason could be them weighing the years of your existing with the traction you’ve received. If you’re asking $ 1M for 3 years old business that has just witnessed 30k transaction in 3 years. You could be turned down because your numbers don’t back up your valuation and

The Cash Flow Is A Problem

Not all startups witness a positive cash flow in the beginning. However, investors do look for proper planning, management, organisation, and a road-map to convert the negative cash flow to positive.

Why, you ask?

Because 82% of the businesses that fail cite poor cash management as a factor behind their failure.

You could have a company with a revenue of $ 10M, but maybe your business model is such that your company can’t get cash flow positive until you reach $ 200M in revenue. This will require a lot of money, faith, and risk for an investor to carry you which (s)he might not be ready to take.


There’s No Barrier To Entry

Investors do look for a unique selling proposition – an idea or an execution that is proprietary. They prefer patents, exclusive contracts, and other barriers to entry.

Investors look for long term benefits. If they invest in a business, they look for whether the company has the potential to remain the leader or a major market-share-holder for a long term till their exit.


They Have Already Invested In A Similar Business

It’s rare for an investor to invest in two similar businesses in the same segment. If you own a T-shirt retail company and approach an investor who has invested in a similar company. There are high chances that (s)he’ll say no – precisely because (s)he’s backing your competitor already.

They Don’t See Transparency In The Pitch

Startup investors invest in the eligibility, motivation, and the honesty of the team. If they feel that you’re hiding vital information or misreporting stats relating to –

  • Manufacturing
  • Marketing
  • Finance
  • Team experience
  • Competition
  • Existing traction and numbers

They Don’t Feel That You Know Your Key Performance Indicators (KPIs)

The investors look for founders who truly understand their businesses’ financials and key metrics that demonstrate how effectively their company is achieving key business objectives. You might find it hard to get investment if you don’t understand your top priorities and critical metrics that represent those priorities.

Investors may turn down your offer if they don’t get substantial evidence of you understanding your KPIs and providing insights on your plans to improve them.


Your TAM Is Too Small

The total addressable market denotes the maximum growth opportunity for a startup. While many founders try to scale down TAM to make it less ambiguous, many scales it down to a level that the market looks to be too small to start a business in.

If the investor believes that your TAM is too small for his investment to produce fruitful results, he might turn down the offer.

You Don’t Have A Deep Understanding Of Your Competition

“How are you different from XYZ.”

“I’ve seen a similar company operating in your niche. Why are you special?”

These and other similar questions often come into play during the pitch. If the investors aren’t convinced with your competitive advantage, differentiated value proposition, and unique product-market fit, they might turn your offer down.

You Don’t Have Skill, Education, Or Experience To Back Your Idea Up

Investors look for a team with proven skill, education, or experience to back their idea up. If you’re an entrepreneur with a proven history of a successful startup before, you might get preference over other entrepreneurs with no such experience.

Moreover, investors also prefer if you select your team based on their qualification and experience rather than their relationship with you.


You Don’t Have The Right Business Model Or Business Plan

A business plan explains your vision and goals and how you plan to achieve those goals – all expressed quantitatively. A business model, on the other hand, is how you operate and make money.

If any of these fails to impress the investors, they may reject your fundraising proposal.


They Think That You’re Uncoachable

Most investors invest as they see the value they can provide to the startup. If they believe that you are too adamant about changing or are being uncoachable, they may turn down your offer.

They predict this during your pitch. If you don’t listen to what they have to say during your pitch, they might feel that you won’t listen to them afterwards as well.

Go On, Tell Us What You Think!

Did we miss something?  Come on! Tell us what you think about our article on Why Won’t An Investor Invest In Your Startup? in the comments section.


Feedough

Why should I invest in a startup?

Let's suppose that this question is coming from a general individual. How should I answer the question? What are the short term and long term benefits of investing in a startup or co-founding a company? What are the disadvantages? How do you usually answer this.

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