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8 tips for building investor traction for your startup

Congratulations, your venture has been published to VC4Africa! So now what? To be honest the process has just started:) The road to funding is a long one and 9 out of 10 ventures never make it. They either fail early, the founder quits or in the best case the entrepreneur realizes they don’t actually need funding and decides to build the business on their own dime! But ok, many businesses also need outside capital so what can you do to improve your chances of finding partners, investors and support?

Here are some tips we recommend you follow:

1) Build a Competent Team – We are talking to investors all day long. When we ask them what drives their decisions, they tell us the team is the most important factor they take into consideration. Especially given the nature of the emerging markets where we build our businesses and the so many factors that remain uncertain. If you are working as a single founder alarm bells should go off! More specifically, no one person is perfect or can do everything on their own. Play to your strengths by recognizing your weaknesses, and seek out the business partners who can compliment your skill set.

2) Plug the Gaps – Even if you have a solid team in place, there are probably still areas of expertise lacking. Also to say that some experience is so expensive it probably doesn’t make sense to try and bring this in-house on a limited budget. Look instead at setting up a board of advisers or creating a network of directors. This is a great way to get industry professionals involved in your business and to unlock some of their learnings, network and advice. Investors assessing your company are not only looking at the team members, but also the group of supporters and champions around you!

3) Go after Traction – Idea stage startups don’t cut it anymore. Investors want to see tangible traction and real progress. Up front investment costs continue to drop for many propositions, and with an ever increasing number of tools available for little or no cost, it gets easier and easier for founders to test their ideas. Critical to be sourcing feedback from the market needed to refine the positioning of your product and/or service. Getting revenue streams up and running really helps to demonstrate your companies potential.

4) Share Progress – Don’t assume people see you or know what you are doing. And without getting distracted from the job of building the business, make sure you take the time to also tell your story. Get out there and pitch your company. Engage on Twitter or maintain an active Instagram feed. Anything that helps people follow the ups and the downs. The more transparent you are about your startup adventure, the more likely someone will notice your work and be curious enough to contact you in the interest to find out more. And really, if you were an investor would you put money into a venture that is hiding all the facts or been ‘standing still’ for three months?

5) Seek Feedback – Investor want to know you are open to critical feedback and want to see that you are working hard to make your ideas better. It’s never easy to hear an alternative opinion about a company you have spent so much time building, but without candid feedback how will you ever make the changes needed to improve? Share your most difficult questions and see who picks up your challenge with the best responses. Best way to know how someone can add value to your business is when they have clear ideas on a way forward. You will be surprised by how many people are willing to help you. But remember, it always starts with you!

6) Engage a Mentor – Do you have a really difficult question or do you have to go through an unfamiliar process? Applying for the VC4Africa mentorship program could be the right solution and is one way to connect with a global network of advisers. Check out the marketplace and express your interest in getting a mentor for your business. Your application will be reviewed by one of our team and who knows you might score a business expert willing to coach you.

7) Professionalize – Investors will struggle to assess your company if there is no documentation. They cannot make an investment if there is no legal entity. If you are serious about your venture incorporate the business and invest your time in properly structuring the organization. Make sure your accounts are accurate and up to date. Properly document your business flows and have this information available in advance to starting conversations. Ideally you should be able to answer some of the most difficult questions before they ever get asked.

8) Conduct Due Diligence – Remember, not everyone out there has your own best intentions in mind. At VC4Africa we think reputations matter and are working every day to make the investment space more transparent. At the same time, make sure you also do your own due diligence on prospective partners. You have to check people out before conducting ANY KIND of business. Find out who they have worked with in the past and reach out to these contacts to find out more about their own experiences. At any time you can contact the team at VC4Africa and we will do whatever we can to guide you along.

Starting a business is one of the hardest things to do. We know it is not easy, but remember there is a global community and a dedicated team in place to support you. The VC4Africa community now connects well over 25,000 business professionals from 159 countries who share one thing in common: a passion for building awesome impactful businesses that have massive potential for scale.