What startup founders tend to overlook is that gaining access to human capital can be just as potent as access to financial capital. The relationships created and nurtured during a startup journey can help founders gain knowledge, avoid pitfalls, break down barriers, and open doors to new opportunities. At the Techstars Startup Week Tampa Bay 2018, powered by Chase for Business, a panel of investors discussed the value of human capital, the importance of knowing your customer, and how to reduce risk for investors. The panelists included: Blaire Martin, CEO and founder of Florida Angel Nexus (NEXUS), Lamont Jackson, senior loan officer of BBIF Florida, Rodrigo Cerveira, Director of Small Business Lending of ACCION, and Brad Owens, business consultant for Florida SBDC at USF, with moderator Ryan McGauley of Chase for Business.
Access to Mentors
For many early-stage founders, they’ve never prepared a business plan, a go-to market strategy, or a forecasting model. All the panelists agreed that having access to training programs and mentors can bridge that skill gap and help founders communicate the health and forecast of the business to a potential investor. Owens explained that mentors can help businesses get off the ground and “help you prepare for the loan you need.” Some non-profit programs will offer low cost to free technical assistance to founders to fine tune their financial skills. At the end of the day, you must be the one to seek out this human capital and expand your skill set.
Access to Customers
Gaining traction and paying customers is a plus for any founder seeking capital. But if they don’t know who their customer is, those assumptions will add to the uncertainty and risk factor with any potential investor. Martin said there are things founders can prepare to validate assumptions and improve their chances of getting funded. And it starts with really knowing your customer base. Martin explains that knowing your customer means understanding who they are, why they wants to buy your product/service, what their buying habits are, how much they’re willing to pay, and how to leverage technology to attract them. Acquiring as much data as you can to reduce assumptions could help reduce risks for investors. For any investor, the key is to reduce their risk and show how your company will provide a return.
Access to Investors
When you are seeking out investors or investor groups, Martin recommends you align your business with people in your space, as they will be more capable of assessing the risk and help provide access to leaders in your industry.
Access to Founders
The panel was asked what common characteristics of a company or startup team that entice them to potentially fund. Check out what each of them had to say below: Martin: It has to do with grit and determination. You can sense they will not rest until this company becomes everything it’s capable of. Jackson: The lending dynamic is important, we will look at cash flow and revenue. Rodrigo: Aside from the requirements, we want to see the financial projection, business plan and how you will use the fund. We want to see that you or your business partner have expertise for the initiative and research. Owens: The most important ingredient for entrepreneurs while starting up is the drive to get up every day to make that business work. Read more about the Tampa Bay startup ecosystem on TechCo This article is part of a Techstars Startup Week content series brought to you by CHASE for BUSINESS. Techstars Startup Week is celebration of entrepreneurs in cities around the globe. CHASE for BUSINESS is everything a business needs in one place, from expert advice to valuable products and services. Find business news, stories, insights and expert tips all in one place at Chase.com/forbusiness. Photos: Brian Blanco for Techstars Startup Week Tampa Bay
