This article was published in the Summer 2020 issue
by Curtis Roberts, Partner, Kickstart
To say that we are going through an interesting time is an extraordinary understatement. COVID-19 has changed our world in ways that none of us could have imagined even three months ago. We’ve now been witness to the devastation that can be caused by a global pandemic. The human toll from this virus is staggering and, unfortunately, we haven’t seen the end of it. In addition, we are also witnessing racial tensions on a national scale that, along with both public and private responses, are demonstrating both the worst and the best of who we are and can be. We wish there was more diversity in VC in Utah. We’re working on our firm’s attempt to help with diversity and inclusion in our sphere of influence. We hope it will help. We hope you’ll help keep us accountable. And in the meantime, we hope that you won’t let the composition of the funding environment in Utah stop you, because we know we’re not the only fund in town that wants to foster an inclusive ecosystem and fund diverse founders.
Amidst these unsettling times, we wanted to offer some timeless (if we can be so bold as to claim that) advice and a bit of hope. In our view, the very conditions we are experiencing as most challenging in the macroeconomy also present tremendous opportunities for entrepreneurs. We believe that adversity favors the entrepreneur; those who seem to have the inherent skills to step up in the thick of challenges in ways that others cannot to lead, inspire, and drive innovation. For those feeling the call of entrepreneurship, we’re rooting for you and offer the following recommendations/reminders when seeking funding:
• There’s almost no human problem that someone hasn’t tried to tackle. When communicating your solution to an investor, make sure you communicate why your solution is better than the best alternative currently available. What would make people go to the pain and expense of switching from the solution they’re already using? It’s a wise idea to make sure your startup is grounded in a need and not just an idea.
• Be able to clearly explain your founder/opportunity fit. Why are you the one to solve this problem? What gives you the advantage? That could be an acquired skill set from what you were doing previously that immediately lends itself to success in your new venture; relationships in the space that give you a head start; personal experience with the problem and therefore an unparalleled passion to solve it. It’s rare that the VCs you’re presenting to haven’t seen an idea like yours before, so tell them why you’re the one best suited to succeed in the space.
• Don’t set out on the journey alone. Fill out your team. VCs like to invest in people, not just ideas, so getting the right people to tackle the problem with you will make your startup a more attractive investment.
• Don’t overthink the product. “MVP” is a buzz term for a reason. There’s a lot of value in getting something out to customers so you can collect a maximum amount of validated learning early on and iterate from there. You might think you have a great product, but you don’t really know until you get someone to pay you for it.
• We love super scrappy founders who are willing to bootstrap. In other words, don’t substitute money for brains. Founders who can make stuff happen on small amounts of money are more likely to build real businesses that survive and thrive in times of stress. Scarcity is a virtue in startups; it forces hard decisions. Focus only on those things that actually generate value to you and your customers.
• Make sure your pitch covers important things like how you make money, how you grow sustainably, who are your competitors, what’s the biggest risk to your success, etc. We love founders who think through the big picture.
• Be able to clearly articulate what you’ll use secured funding for. We love to see that people will be using funding for product development and revenue generation as opposed to internal operations and expensive office leases. There’s never really an ideal time to dive into the waters of entrepreneurship. There will always be a reason (or two, or ten) not to do it. This year it might feel like the universe is sending every signal in its arsenal to stop any form of risk-taking. But if you’ve got a great idea, don’t let that stop you. As the old Latin proverb proclaims, fortune favors the brave. Again, we’re rooting for you and hope to see you in our offices to pitch us sometime soon.