Entrepreneurs are more than just business owners. They are visionaries and risk takers. They have a passion and insatiable drive to develop a business, taking on risk in the hope of financial gain. They are often the people that disrupt an industry and provide change and new and innovative products to the market.
So if you are a budding entrepreneur how do you UP your game?
Here are our top tips!
1. Develop a high-quality business model
You need to survive both in the short and long term. Instead of focusing or obsessing over funding and capital you should be looking at how you can build a lean and efficient business. Sometimes a lack of funding can help you be more innovative and creative about how you execute something. Excess capital can lead to lazy business and can inhibit your ability to scale up in the future.
2. Have a team of pioneers
Many times a startup is based around an entrepreneur and their individual and unique vision and passions. However, if the business is built around one star person it can make it almost impossible to sell or step back from the business in the future as there is no value without that person. Instead consider founding the business with a team of pioneer stars rather than one. This can also mean that you have a more diverse group of people and ideas that can help the business grow quicker.
3. Values and Ethics
Values and ethics aren’t just for large businesses. Entrepreneurs that have startups usually want them to grow into big businesses. So even when there is only a couple of team members make sure that you focus on the culture and the values and ethics of the business. This will ensure that as you scale up you will have the right culture and will attract the right people.
4. Harvesting an Investment
Australia’s startup ecosystem is still relatively young, and we have a very small Angel Investment pool, compared to for example USA or Asia. Reality is that for most startups Australia is still a tough environment to raise capital. There are always exceptions, and there are quite a few startups that raised funding off an idea alone and went on to have huge success.
Along the way, we’ve learned valuable lessons about Angel Investors. Here are some of the questions and tips that could be helpful.
- What funding stage are you in? Investors are more likely to put money into the later stages of development (product development, commercialisation, scaling, etc.), because it is less risky than investing in an idea that has no research to prove it’s even a viable opportunity in the market.
- How Angel Investors approach risk ?
Early Stage Investors - usually won’t take a risk on the product (building it, validating it), but they will accept some modest market risk.
Growth Stage Investors - will only take execution and financing risks. They are increasing in Australia.
Late Stage Investors - usually only accept modest expansion risk.
Seed Investors - they take the most risk– product, market, financing, execution, and team risks.
- When will Investors invest? Investors will likely invest if you can tick all of the boxes below:
You are a passionate entrepreneur.
You are backing up your idea with a logical plan. (the Investor can see how he will get $1.5 back if he puts $1 in.)
There's a validated need for this product and you did everything you could to de-risk the investment.
This shows the investor how the business idea makes sense.
5. Global Expansion - ability to scale
Doing business around the world can seem a long way from doing business in your hometown. But most startups today, consider overseas expansion from their inception.
International expansion does not make sense for all businesses. It might seem obvious, but many entrepreneurs can be swept up by the buzz around globalisation.
So how do you start going Global?
Going overseas and working out of an incubator or accelerator can give you the tools to understand the market you are entering and develop connections on the ground quickly.
Great example are LANDING PADS. These programs provide market-ready startups and scale ups the opportunity to take their business global - to land and expand in global innovation hubs. Some of them are located in San Francisco, Tel Aviv, Shanghai, Berlin and Singapore. They give you access to:
- a 90-day residency in a co-working space
- introductions to networks of investors, mentors and strategic partners
- access to a community that supports Australian entrepreneurs
- business advice to help grow your business.
What this gives you is the opportunity to develop a clear international expansion plan having tested the appetite for your product.
Being an entrepreneur can be an exciting roller coaster of emotions and experiences, but most of them wouldn’t have it any other way!