Starting an online business or tech startup isn’t that easy as it might look like. It can be very bubbly. I’ve seen a lot of millennials with great ideas for apps, software, and platforms. Did you know that 90% of all startups fail… Let me share some of my personal tips when you are dreaming of being a startup founder and want to start right away.
Create a strong Pitch Deck.
Ask for help within your network, get in touch with startup founders, go to meetups, and look for great pitch deck examples online or read my latest blog post. An important aspect of your pitch deck is your business model. Investors don’t invest in only a dream, they eventually want to see the return on investment.
The Mom Test.
Before you want to talk to investors. Present your pitch deck to others. Preferably not family and friends. Maybe you’ve heard of the book The Mom Test. This book is a quick, practical guide that will save you time, money, and heartbreak. They say you shouldn’t ask your mom whether your business is a good idea because she loves you and will lie to you… Make sure your Pitch is short and simple. You don’t want to waste peoples time.
Looking for a founding team.
This is basically the foundation of your business. Sure, it’s important to have a strong business case. Besides that investors want to look you into the eyes to see if you can make it happen. Are you and your co-founders capable to manage the expectations? In tech startup terms your founding team needs to look like this:
★ The Hipster: Usually working their way into the mix as the designer or creative genius, they’ll make sure the final product is cooler than anything else out there.
★ The Hacker: The one most likely to sit quietly through a board meeting until uttering the three sentences that answers the all-important question of “how?” the new idea or initiative can be brought into reality.
★ The Hustler: They have the tendency to be the most misunderstood member of this trio. The Hipster is likely to accuse the Hustler of having sold out to the man because of their constant question of “It’s cool, but is it something our partners and clients want?”
In order to start your company, you need funding. There are many ways of raising capital:
★ Bank: There are some prejudices about banks that they don’t like to finance startups. Do not be fooled because there are always possibilities. In my case, I got a loan from the Rabobank. They introduced Pitch&Go last year where you Pitch in 15 minutes to a team of bankers. Michael my co-founder and I convinced the bankers about Influentials and we got a loan.
★ Angel investors: To kickstart your first round of funding you can always talk to family and friends. They know you in person, your qualities and what you’re capable of. You can look into a convertible loan so you don’t have to worry about the right valuation as you’re working on launching your MVP*. Usually, it converts at the next investment round into equity. It saves you a lot of paperwork and headache. There are platforms like Leapfunder who help you with this.
★ Crowdfunding: If you’re launching a product or service for the consumer market I will definitely go for a crowdfunding campaign. It’s a fast way to raise money and you will engage directly with your customers. They will invest in your company and be ambassadors at the same time. Great platform for crowdfunding is Symbid.
After you raised capital it’s time to establish and register your company at the Chamber of Commerce. Get into the forms of enterprises and look what works for your startup. There are many specialists who can advise you which form works best for your company. Please invest time and money into this. I know it might seem expensive and unnecessary but you must have everything on paper. Michael and I went to see our lawyer who helped us with our shareholder’s agreement. Even though the relationship is going very well now between you and your co-founders, you never know what happens in the future and you need to protect all involved parties. Should something ever happen, you can always fall back on the signed agreement.
Don’t go crazy.
Congrats, now you’re really in business. You’ve got a plan, founding team, capital, and a registered company. Whatever you do, think carefully. My dad always told me that everything you do not spend, you do not have to earn it either. That’s how I invented the world of bartering. For example, I bartered a year contract with smart. I drove a smart fortwo for a year long in return for social media content on my personal channels. It really helps you to save money in your first years. It’s good to know that we signed an agreement for this barter deal. You want to have things straight and no misunderstandings about what may cost your business relationship.
Ready to launch!
Think of a kickass marketing strategy to let everyone talk about your company on social media. Have you ever thought to involve influencers within your launching event? You will reach loads of people instantly.