Hello Startup, your investor is your ally!

Have a little thought for the Investor. Investors are not out to rob you! Neither do they have millions of dollars to burn. Like you and me, they are equally accountable. At Gaaia3, we work on both the fundraising and the funding side and see both as two sides of the same coin.

We have ourselves invested in some early-stage start-ups. Take it from us, it is not easy. If you are a start-up seeking funding, you need to understand that one way logic does not work.

Some food for thought

• Will you be willing to invest your own money at the terms you are offering? If your answer is an immediate “yes,” you have not given it the thought it deserves.

• Are you making reasonable assessments on your investments in terms of time and energy into the start-up, or are you charging hourly rates of Big3 consulting companies for your time?

• Valuation at an early stage is already a very difficult and touchy subject. Please think twice before you do a 10-year cash flow projection to arrive at what you think is fair value. 10 years is a long time in start-up years. Let your valuation be realistic and not based on the investment you are seeking and the equity you are willing to dilute.

• Your investor is not your adversary. Competition is. It helps to remember this.

• Understand the region in which you operate and the investor mindset here. Silicon Valley rules don’t universally apply.

• Wipe the thought that the investor is “just” bringing money to the table. He is trusting you. Do you only see the money, or do you see the trust?

Your investor is your ally. Choose wisely and understand that generosity and empathy can go both ways. There is no coin toss to determine the winner!