Any entrepreneur knows the value of a good investor. For Startups and SMBs seed money is often necessary to jumpstart productivity. Beyond Seed money, many CEOs and business owners need a little cash injection to help them grow to the next stage. From tech to manufacturing, the role investment plays in business is time-honored and valued almost as much as it is feared and reviled.
Going out asking for money often seems like begging for cash. To a nation of “pull up your Bootstrappers” it can be a difficult, trying process. Venture capitalism has advantages and disadvantages, but here’s the secret: Startup investment is a $120 billion dollar industry. Everyone needs help – even big companies. The potential rewards of safe, smart growth far outstrip the downsides.
While large Venture Capital firms such as Sequoia Capital, SV Angel, and Accel Partners are known and respected, our Venture Capital analysts at SDI have been looking towards the world of Angel Investors and wealthy celebrities who show a flair for wise investing.
One of these people might surprise you: The indomitable Ashton Kutcher. Yep, the man who brought us Michael Kelso, Dude Where’s my Car, and Punk’D, the man who made much of his early career by playing various “stoner” roles. Turns out, he’s got a nose for startups that win – and win big.
Kutcher’s investment firm (A-Grade Investments) has made some of the most profitable decisions out of any tech VC firm in the last half decade. Kutcher has his fingers in all sorts of pies:
And those are just some of the bigger projects he’s funded. A-Grade Investments has demonstrated itself to be one of the best predictors of success in the tech world – and Kutcher isn’t one to make small investments that go no where. So how do you get some of this wonderful cash he’s sitting on? That’s easy – get some help from Silicon Valley’s tech firm. Afterall, we have established networks with dozens of VCs and Angel Investors throughout the Bay Area.
Start with a Unique Pitch
An investment pitch is about selling yourself as much as it’s about selling your idea or company, maybe even more so. Investors want to know if you can cut it:
• Are you passionate about your project?
Running a startup requires passion – you have to love what your doing – or even sometimes hate it! Just make sure you have the passion needed to see it through.
• Are you dedicated enough to stick with it?
Startups and SMBs often require 20-24 hours a week. Investors want to know you’re not going to burn out a month in. Make sure they know you can stick with it.
• Is your idea feasible?
The uncomfortable truth is that everyone and their brother has an idea. Investors need to know your idea can work. We recommend creating a prototype or MVP that demonstrates the effectiveness of your idea. Don’t worry – SDI can help you build a prototype of your app or website that will impress any investor.
• Are your projections accurate?
Investors aren’t dumb people, Kutcher’s acting roles aside. They’re smart and, more pointedly, they look a numbers all day long. In fact, knowing how to read a budget and judge potential is Venture Capitalism 101! Be honest and realistic in your projections. They will know if you’re fudging the data and *poof* there goes any hope of investment.
Sometimes having an MVP isn’t feasible – so what do you do? The good news is that an MVP can be something as minimalistic as a PowerPoint presentation. But from our research, this isn’t necessarily the best idea. Our strategists started working with our developers to create a new approach – Pitch Websites. We build websites that convey your idea in a much more interactive and innovative manner. These websites are light – a few pages at most. They aren’t live to the general public and only those with the URL can access it, but they have proven to be effective. They have several advantages over a PowerPoint:
♦ They can provide more information;
♦ They’re unique and memorable;
♦ They’re interactive;
♦ Each investor gets to view the website;
♦ VCs can view the website at their own pace and even reference it after your presentation had concluded; and
♦ They show you’re tech savvy and have good development team on your side.
• Are you asking for too much money? Too little?
Nailing down the right amount of money for which you should ask is as much an art as it is a science. The first step is always to come up with realistic numbers. What are your expenditures? Not just the big ones like staff and material, but the small ones like office bills. Base your request off of that – but don’t go to big. If you ask for too much, VCs will just assume you’re ripping them off.
However, asking for too little has sunk just as many investment opportunities. If you ask for too little money, you won’t be able to grow, recruit/retain talent, or offer new services. Worse, many VCs will think you don’t have enough faith in your project to request a healthy investment.
Seeking investment is a hair-raising, nerve-racking event. No one likes it, but it is the path a smart entrepreneur takes. Whether you need millions or just a couple thousand to realize your dream, Investors like Ashton Kutcher make it happen.
Silicon Valley’s Tech Firm
Ashton Kutcher says that the one thing he looks for in a project is if it solves a need. That’s not a high bar to meet – everyone of us has a problem solving idea on the back burner. If this sounds like you, but you need some financial help getting there, send us an email.
We can help connect you to some of the biggest names in VC and Angel investing. Moreover, we can help you create a pitch that will make investors sit up and take notice. Give us a call at 408.802.2885 today to get started.