There’s been a lot of doom and gloom about the state of Venture Capitalism and tech startups. Many tech market experts fear that the funding for tech ventures are drying up. But really, that’s a load of bull hockey.
10 years ago, you could get funded for any tech project without really trying. Today, that’s not the case: like every other industry in need of decent funding, there’s a now greater need to develop a pitch that truly shows the potential success (and revenue generation, naturally) of your startup.
The point is that the VC and Angel Investing funding is not going away, not by a long shot. Think about how many app industries represent a multibillion dollar potential:
♦ Business to business; and
Obviously, this is just a small selection of money-making tech enterprises, but the point is that each represents a market that is worth billions and potentially trillions of dollars. The idea that investors are simply not investing in these areas is ludicrous. These are financial geniuses and the revenue potential of apps and the broader tech world is obvious even to the laymen.
In other words, while the money may be harder to get, it’s still out there. The fact that VCs and investors are being more choosy is actually good news for Startups with great ideas and an excellent pitch (contact SDI to help build a winning pitch!) because it means a larger potential share of the investment money out there.
So what’s going on here? Why are there so many people out there who are worried that the investment for tech projects are drying up? Let’s take a look at what’s happening, and how truly disruptive tech projects like the one’s SDI builds can raise plenty of investment cash.
The biggest problems facing tech startups to day is how quickly technology is improving and evolving so quickly that many startups are falling behind. Think about it: 5 years ago, VR and AR were the stuff of Sci-Fi and futuristic movies. Today, they’re one of this biggest money making arenas in the app world – and is changing so rapidly that it’s hard to keep up.
This speaks to a) the need to hire a top-notch development company that keeps on top of the changing world of tech; and b) the need to think “disruptively.”
While the word disruptive is frequently overused, it speaks to what VCs and Angel Investors are looking for. Just take a look at what Chetnan Puttagunta (one of the biggest VC names in Silicon Valley) has to say about Mindtickle:
“They’ve created a really cool platform to onboard, coach, reinforce and then update the sales team.” – Chetnan Puttagunta
This points to what investors are looking for: mobile-centric startups that think outside of the box. Because, as any CEO will tell you, training a tech savvy staff is no simple task. More often than not, you update your staff, only to find out that the training you just gave them is now out of date.
Mindtickle confronts this issue head-on with continual training updates, accessible from a trainees mobile device – whenever it’s needed. This points also to what is really going on in the tech world: not a drying up of funds but a push towards “accelerated development,” or companies that are equipped to respond rapidly and accurately to world that is constantly evolving.
Why don’t we take a closer look at what investors are looking for in a winning tech startup and how SDI can help get you the funding you need.
What Investors Want
Chetnan Puttagunta points to 4 specific categories that he looks for prior to investing in Startup:
“You need a sophisticated website, sophisticated social presence, sophisticated re-targeting presence, and a sophisticated mobile presence.”
These are all aspects to a robust Social Media marketing campaign – something with which SDI excels. We know how to build mobile websites that will show off your company, provide a good marketing “base camp” and is designed to grow your brand’s virtual presence. SDI can create you a Social Media marketing presence that gets ordinary people talking about your company – constantly.
As Mr. Puttagunta points out, having a mobile-first presence is essential to not only the funding success of a venture, but the overall success. From the perspective of investors, pitching a tech idea that’s not Mobile First is like walking into a meeting in 2010 pitching a new idea for a rotary phone.
TechCrunch, online tech magazine and a big tech investment company, recently covered a list of things they look before shelling out money for startup investment rounds. Some of it is pretty obvious, such as honesty and clarity. One of the biggest turnoffs for any investor is an entrepreneur who is not being honest and forthright.
This is why when we build a VC pitch, we offer real projections, supported by real data and actual numbers. In a pitch, We clearly outline every step we intend to take, so investors know our clients are trustworthy and have an actual chance to succeed and payoff.
This includes demonstrating that we have actionable metrics that can be used to judge how well our client is doing (aka Key Performance Indicators, or KPIs). We emphasize this because investors want to know you, as a Startup CEO, knows how to judge the success of failure of your business.
The other big thing investors look for are barriers to competition. You may have the greatest idea in the world; once you’ve dropped your product on the market, others are going to try to copy it. Worse, they’ll be able to do it cheaper, better, and faster. This is why you build roadblocks to competition.
At SDI, we’ve found that the best way to do this is to create a product with lots of complicated, excess coding. This doesn’t add extra time or money to the development process really, nor does it take away from the overall functionality of your platform. But what it does is make it hard for competitors to emulate your success. Plus it gives you a proprietary technology that cannot be legally copied!
This may seem silly, but this was one of the key factors to Uber’s success. They designed an algorithm so ridiculously complex that competitors had to start from the ground up. Which of course means they need to raise a lot more funding.
Even better, it’s going to be harder for them to get VC investment as well. Why would an investor give money out to a company that’s 3 years out from launch, let alone revenue generation? Especially when there’s already a successful company (yours) out there doing it! The good news is that you can call SDI to build you a demo that shows exactly how you plan on beating out the other guys!
Read to get started on your own Demo and pitch for VC and Angel Investors out there? Give us a call at 408.802.2885/408.621.8481 – or click to contact us!