Investors

Investor mindset

Karan Chopra Founder & CEO at ARTYSTANT

October 23rd, 2017

Would an investor invest on an idea phase of the business and that too without the available market statistics ?

I know a lot many folks who are working on the new untapped markets with great opportunities but lack the startup capital and statistics. Even I am one of them and facing a deadlocked situation !!

Suggestions are welcome !!

Mich M

October 25th, 2017

It's very rare to find someone to invest in an idea unless you have some relationship prior. Not only do most investors, including angels, need proof of concept but want to see customers/users.


There are several ways to get started depending on what type of business you have. Self-funding through loans/savings, friends and family, grants, pre-sales with prototype, and crowdfunding are common options. I would recommend putting together a short business case since it will force you to look deeper at your market, competitors and finances. Good luck!

Robert Kasonde founder & CEO for Kascorp Limited

October 23rd, 2017

The most valuable asset in a business plan for it to be seen as viable are customers that are willing to pay for your product..so market statistics are very important.

David M

Last updated on October 25th, 2017

First I would ask where are you deadlocked? Have you written a business plan? Where in that process are you deadlocked? Beyond that my ten cents are evaluate the competition. There is always competition. If you tell most investors there is no current competition, you will immediately be seen as a novice entrepreneur. In graduate school for entrepreneurship, I already had a working knowledge and experience of entrepreneurship. At times my entrepreneurial spirit would rebel against certain textbook industry standards and "rules." Entrepreneurs generally do not like rules or being told to follow a road. But there are reasons for some rules. The two biggest that were constantly beat into us were 1. Never, never say you have no competition, and 2. Never say you only need to get 1% of the market. Both, we were told, would immediately turn investors off and signal incompetence in the entrepreneurial process. Having worked through numerous start ups and business plans now, it is absolutely correct. Doesn't mean you wont beat your competition. Doesn't mean you wont achieve 1% or 2 or 5%.


I know sometimes it feels right to say "Forget that...there is no current competition." But you have to think beyond the moment, and word current.


I have yet to meet anyone or hear any idea where I can not find competition or potential competition. If you are having trouble of thinking of who the competition is, consider the industry or "space" your new never seen before idea exists in. Where are you going to be taking money from, who or what company?


There lies a good source of your competition. Wherever your revenue source is, you can guarantee that there is a big player who can likely mimic and create a competitive product very quickly...however they can also be an asset and potential acquirer.


Second to all of this is where is your business plan? Nothing will scream to an investor you have no idea where your company is going, or you are not willing to put the effort into it like not having a business plan.


With all of that said, if you have a rich uncle, you might get an investment on an idea. You might meet a generous investor who likes you and pays you to develop your idea...happens rarely...I would play the powerball if you find that investor as well...and go ahead and win $300M to add to your windfall:) More likely, you will meet some body with money who takes your idea, pays people to create a business plan around it and says "Thanks pal."


As for statistics. If this truly has no source of stats, look to the "Pain" it reduces. I hate catchy buzzwords which is why I put them in quotes. An investor will look for the "pain" it reduces.


Example: You create a teleporting machine to an undiscovered earthlike planet. Doesn't exist and there are no stats on it. But you can prove people would buy the trip to escape having to listen to mainstream media every day, escape famine disease, pollution and politicians here on earth. And you can do polls of this even if its just a simple facebook poll. Put that into your business plan. Your competition, likely buyer will be Elon Musk. Competition will be any industrialist who believes they can profit from resources on that planet.


Another example: You are working with scientists who discover a new mineral that mimics gasoline. No one is doing it. Competition is big oil, so in that case, I would forget the idea or get a lot of body gaurds:) Kidding just place a lot of US senators on your board of directors.


Even if it is a truly "untapped market" you can still evaluate who would buy the product/service with polling. And if your business plan supports reaching those people and adequately operating in a profitable manner you will find an investor to get behind it, or at least be taken seriously.


The best place to start is working through an opportunity evaluation process. Shoot me an email if you want, and I will send you a few evaluations you can go through to see where you are prior to a business plan.

Thomas Yip Beer enthusiast creating a craft beer marketing platform with seven years of Wall Street experience

Last updated on October 24th, 2017

In my former life I projected P&L of biotech companies developing drugs for diseases without any competitor. You just have to use the closest comparable to estimate the market size and revenue potential. Ideas are just ideas without as estimation of how valuable that idea will be and a viable plan to get there.