Hazel Moore explores the trend of investing in start-ups, and gives some tips on how start-ups can gain funding
Corporate investment in start-ups is on a major growth trend. According to CB Insights, a machine intelligence platform, corporate venture capital rose to over $31bn in nearly 2000 deals in 2017, with the most active investors including the likes of Google, Intel, Qualcomm, Cisco and Salesforce. More and more corporates are getting in on the action, with over 180 new corporates investing in start-ups for the first time in 2017.
There can be many benefits from getting investment from a strategic investor including credibility (you have successfully proven that a major market player is interested in what you are doing), acceleration of time to market (if you can leverage the investment with a commercial or technical partnership) or even strengthening your links to an eventual buyer. However, it is not necessarily easy to get money from strategic investors. Here are some tips, based on our experience over the years.
Deborah Magid, Director of Strategy at IBM Venture Capital Group, explains in a video on our website: ‘We go to places where start-ups hang out. If they give a good pitch, I’ll go up and give them my card. We usually don’t meet start-ups randomly, we use the community and network that we’ve built up in order to meet companies who look really promising.’
The ‘narrative factor’ is one that is often underestimated, but just as charisma and a personable manner are important traits in individual salespeople, so too the story of your business itself because it provides a powerful vehicle to spark interest and emotional buy-in.
Hazel Moore is the chairman and co-founder of FirstCapital, an investment bank specialising in advising high growth European tech companies on M&A, private equity and growth capital. In 2017 she was awarded an OBE for services to entrepreneurship and innovation.
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