Investing

How to start a conversation with Startup Investors

In this segment we talked to Shahid Chishty talks about How to start a conversation with startup investor

Okay, so if I wanted to talk to investors

having a product having some sales great, but do I just go up to them? And tell them this? Is my company this right do or how should I communicate with them? Do I give them any marketing material? Tell me about that. Yes,

that's me. The, the founders and startups will will usually prepare a pitch deck.

What's the pitch deck? Yeah,

I'll go to Pete's sake, I was gonna say, they also will usually prepare for a short summary. So that's usually called an executive summary. But the pitch deck actually is is a perhaps a ideally attend to maybe 15,

mostly, usually maximum 20 page set of slides, which really show what your idea is

what motivated you perhaps, to undertake that startup, it provides background to the founder and perhaps other team members, which would usually be on board by then as well. It provides maybe some financial information on what the prospects for the business are. And usually it also will include what's called a go to market strategy also, how the, how the founder wants to maybe develop his product or service and then how he or she also wants to get it into, for example, if it's a retail product out to retailers, what the strategy is maybe locally, regionally, nationally, internationally, even so, those sort of things will also be the kind of questions that investors would want to know about.

What are the different types of investors for startups

Today show, we interview Shahid Chishty who is a former investment banker at Deutche Bank and Merril Lynch. He has worked with companies at all stages and now finds himself focused on early stage startups, mentoring and advising them on their funding and capital raising strategy.

So talking about investors, how many different types of investors are there? And where can startups or entrepreneurs get their funding from VCs angels? But if you could talk a little bit about each of those, I guess, and banks and any other source. Yeah. And remember, think of me as someone that has never heard of any of this stuff? Yeah,

that's very good question. Actually, there are numerous routes to getting financing. In fact, I think founders and startups nowadays have a hugely greater opportunity than existed many years ago, the,

especially the ecosystem in Silicon Valley is extremely broad. So you have angel investors at the smaller end of the scale, who will typically invest 2025, maybe $50,000, some obviously can invest more than that you've got family offices, you've got venture capitalists, and then the scale goes all the way up to, you know, private equity firms and so on.

Tell me about an angel investor, what is an angel investor, an angel

investor, again, there are different sorts, sometimes you have angel investors who worked at larger corporations, and they perhaps have excess time or they have excess cash available, and they think, okay, you know, I can invest in something that sounds interesting, or you know, that through their work they think they know a little bit a little bit about, and then you've got, perhaps successful entrepreneurs who've actually got, you know, previous successful startups that they have maybe sold, and they bring with them certain areas of expertise, whether it's a certain vertical as the artificial intelligence or machine learning in robotics, in tech, all sorts of other areas like that. Or it could be a specialization in terms of what they're doing, for example, to marketing in terms of maybe certain engineering skills they have, and so on. And they will typically try and invest in those areas where, where they can apply, and they can help the founders and startups with their expertise,

okay? So. So an angel investor Menton checks between 25,000, possibly 50,000, maybe a little bit more. They might have been successful entrepreneurs or industry experts. What about the other groups? you'd mentioned? You mentioned family funds, what's the family fund, a family fund, it's essentially

a fund which has been put together by a successful either founder or families. So sometimes you even have two or three generations of families that that have been operating a particular business. And if they've perhaps sold that business or generated significant amounts of cash from that business, they'll put it into a fund and then certain allocations will be decided upon, you know, they could decide to put some in very secure investments, they could decide to put a portion of the fund into more risky investment, which includes early stage startups and so on.

And so those are generally refer to them as family funds, and you've got single family funds, you've got multi family funds, multifamily funds being, for example, several families getting together and saying, you know, okay, this is going to be one fund and that they, they, they then again, decided upon where their joint interests are, and and invest accordingly. Okay. And then you also mentioned VC, VC, what does that stand for VCs, a venture capitalists, and again, there's a wide range of venture cap plus some have

interests in particular vertical, again, like verticals I mentioned. So it could be ad tech, FinTech, med, tech, health tech, they're all sorts of texts, or it could be in a geographic area that they tend to focus or it could be a particular stage of investments that they focus on. So stage of investments could be pre seed, very early stage where it's just an idea to seed and then you've got a rounds, B rounds, C rounds, D rounds and so on all the way until maybe a company is very large and could potentially do an IPO.

What is a fund-able company

We talked to Shahid Chishty about what is a fund-able company. A company that fits the description of what an investor will look at

What is a fundable company? And what I mean by that is not everyone in this company is what investors look for. So, could you kind of give a brief introduction to what you believe, is a fundable company and one that is not,

I think it's, it varies, actually, some companies really surprised people when they get funded. And I think generally, those founders that come up with a novel idea, and especially, perhaps also those that have had a successful track record previously, not necessarily in the same area, though, those founders tend to succeed, they tend to convince investors that they've got an interesting idea. And then it's a matter of building the team and undertaking the follow through from that. So I

guess even even a step back from that if I had a bakery, without be considered a fundable company for a minute, an angel or VC point of view, or does it have to have, you know, algorithms in it? What What, what is the investor look for? Well,

I particularly focus on technology startups. But in essence, any business with which which you can prove as a founder, you know, should be viable, could potentially attract investors, you could, you could come up with a completely new idea as to something that no one has ever done before. And, and it could be successful, it could be a reasonably simple idea. On the other hand, I would say, especially where I'm focusing on technology startups is that that there is a trend that the more sophisticated technologically the startup is, there's there's good good likelihood that it'll be successful if the ideas is is a good idea as well. The novel idea and I come back to the point that if the founder has gone very good experience as well. That'll certainly help in terms of discussions with investors.