What venture capitalists expect from 8 start-ups at NES #23

Eight Nigerian start-ups will make presentations in front of venture capitalists at this year’s Nigerian Economic Summit, tagged NES#23.
The start-ups will be those that are three years or below and will have the chance of being funded and supported by the venture capitalists, Udoma Udo Udoma, minister of budget and national planning, disclosed in Lagos last Tuesday.
The session, which is tagged ‘Start-Up Pitching Event’, will connect newly established businesses with venture capitalists that will enable them realise their potential.
Nigerian start-ups are hard hit by poor funding and lack of long-term funds, which is hindering them from turning big ideas into wealth. But this could be a relief to some businesses.
“What we are trying to do is to support innovation and ensure that young Nigerians with innovative ideas are supported,” Udo Udoma stated.
Start-Up Digest has articulated some of the things venture capitalists expect from start-ups that will pitch their ideas at the event.
One key expectation of any investor is the capacity of a business to provide sustainable solution to a known problem. John Marbach, an entrepreneur and technology enthusiast, shared his experience at a start-up pitching event. “Throughout last summer and the fall I had pitched an idea for a bookmark curation site. As it turns out, it’s not a compelling problem for many people. To cut to the chase, the average consumer can live without an improvement to their current bookmarking tool. And the business for bookmarking isn’t highly sustainable. I tried to build a business from a start-up idea, and I failed,” Marbach.
He advises start-ups pitching ideas to ensure they validate the problem their businesses solve before presenting them. Venture capitalists will be looking out for start-ups that find sustainable solutions to problems or solve problems in entirely new ways, which also have well-defined market and customers.
Secondly, investors are interested in numbers, rather than a generic statement like, ‘We are doing quite well.” Venture capitalists want to see and hear how much revenue, profits, expenditure and losses in the financial statement. If you are an exporter of cashew, how many tonnes do you export within a season: 5, 10 or 20? How much do you make from each container? Who are your buyers? How much risk do you bear? How much does it cost you to move cashew to Europe or USA? What are your future plans?
Moreover, Entrepreneur.com says that venture capitalists are looking for entrepreneurs that think big and act small.
“Venture capitalists want to back people whose unique insights challenge the status quo. Their investment decisions are personal, so it’s best to think of a capital raise as a social movement. If you communicate clearly and have a unique insight people can get excited about, the money will follow,” the online newspaper says, adding that start-ups must show proof that they have a mission that is big enough to stretch staff from where they are to where they need them to be.

 
Odinaka Anudu