GETTING INVESTOR-READY AND BRIDGING THE VALLEY OF DEATH?

Getting investor-ready and bridging the Valley of Death? Jan Geert van Hall answers

Getting investment as a startup is such a challenge that there are specific hurdles, one of which is the Valley of Death. YES!Funded team from YES!Delft aims to demystify this challenge during the Rotterdam Capital Days with a dedicated event. During September 18th – 22nd, the three-day event aims to demystify the world of capital, boosting access to funding for startups and scaleups. Ultimately, with the goal of connecting entrepreneurs and investors. Anyone with an interest in how to attract and raise capital in the area of Rotterdam is invited. Mainly, there will be investors – angels, corporate venture, venture capital, impact, public, and more. YES!Delft service YES!Funded will host an event about the so-called Valley of Death in funding. 
What is the Valley of Death?

Jan Geert van Hall, the investment director at YES!Delft describes the Valley of Death as a European problem – the funding gap startups almost inevitably run into. This funding gap usually comes about around the time they have a well-working prototype and some paying pilot customers but need a financial boost to start production and activate sales. At this point, the startups are too advanced for government subsidies, and at the same time too early stage for VC’s. At least in Europe. During the YES!Delft dedicated event at Rotterdam Capital Days, Jan Geert and guests will share the experiences of YES!Funded about the Valley of Death and explore possible solutions to this problem.

Through the YES!Delft service YES!Funded startups can get help with financial lifecycle planning and securing the right funds. The initiative is lead by YES!Delft investment director Jan Geert van Hall, who employs his decades of experience in tech and finance to help tomorrow’s leading firms. Is your startup is looking for its first investment or your startup is further down the road? Here Jan Geert shares his top five tips that are essential to make and keep your startup investor-ready. Join YES!Funded at the Rotterdam Capital Days, and learn about bridging the Valley of Death.

1. Financial forecasting

“The ability to look ahead and anticipate for the future is a basic entrepreneurial financial skill. The lack of such a vision within a company is a definite red flag as it shows a lack of financial discipline.”

2. Top team

“This is a big one. First off, the chances of receiving investment are very low if you are a single founder. Ideally, you have a team of people with different disciplines. Secondly, there is a shared long term vision in the company. Especially the founders should be on the same page and have the same ultimate goals, whether that is an acquisition or scaling up.”

3. Intellectual property

“IP is another facet investors will look at, and for several reasons. First, to make sure you will be able to defend your product from infringement. But parallel to that, they want to understand what it is your product is capable of and the problems it claims to solve. Why is your product unique, and why hasn’t it been invented before?”

4. Checking important milestones

“Having a roadmap with milestones and a clear vision is essential. It shows your estimated worth at each milestone but also the amount of money you need to get there is invaluable when presenting yourself to investors. It doesn’t have to be perfect, but it demonstrates you understand your product, your market and you have thought about de-risking your proposition.”  

5. Quantify the risks

In conclusion, everything comes down to this. When you look from the perspective of the investor, you want to be able to assess the risk of your investment. Sure, you can never completely eliminate risk, but startups who can at least show an understanding or can quantify the risks and milestones, have a stronger case for investors.” 

 

Make sure not to miss the event Bridging the Valley of Death during the Rotterdam Capital Days!

Robert Jan van Vugt Operational Director YES!Delft

Startup Expert Blog: Robert Jan van Vugt

Startup incubator YES!Delft has an amazing and vast ecosystem, with top experts from all fields. Everything from finance, to HR. Their knowledge can be accessed through workshops, mentorship and office hours for YES!Delft startups. To help you find your way to the expertise you need from our ecosystem, we shine the spotlight on our experts!

 

Robert Jan van Vugt is the YES!Delft Operational Director and is one of the initiators of the brand new workshop Co-Lab. Collaboration and the importance of team are central themes of the workshop. Robert Jan van Vugt is a startup expert has years of experience identifying the central needs of startups and businesses, and developing programs tailored to those needs. Here Robert Jan shares five points on how important a good team is for your startup and all the benefits it can bring you!

 

1. Size matters

“There is a tendency to attribute startup success to “lone geniuses” – research shows otherwise. There are plenty of examples out there – take Apple: Steve Jobs didn’t work alone, he had Steve Wozniak and Ron Wayne to get the startup off the ground and make it into the company that is todayThe team size is tied directly to the probability of a firm’s success, and this is supported by almost four decades of research. Data has shown that a team that has two or more founders has an 83% higher chance of succeeding. On the other spectrum, having only one founder takes a startup on average 3.6 times longer to scale.”

 

Join Co-Lab! Connect with fellow potential business founders.

 

2. Diversity is crucial

“Team size ties directly into this – experience and diversity play a significant role in a startup’s success. It has been shown that having a team with people who have a diverse set of skills and different backgrounds, have 2.9 times larger user growth. This means a balanced mix of tech and business experience, but also hard skills and soft skills. Team diversity is crucial as it brings in a bigger network and helps to identify opportunities.”

“Steve Jobs didn’t work alone, he had Steve Wozniak and Ron Wayne to get the startup off the ground and make it into the company that is today.”

Robert Jan van Vugt, startup expert

3. Caring is sharing

“Starting a business is hard. Not just from a professional point of view, but the personal toll is high too. Polls show that entrepreneurs experience significantly more stress and worry than other workers. However, it is important to remember that a shared burden is a lighter one and a celebration is much more fun together. A team is not only there to help you achieve your dreams, but just as important, they are the ones you celebrate your successes with, but also share your failures.

 

Join Co-Lab! Meet like-minded entrepreneurs.

 

4. The team is the issue

“When founders self identify why their startup failed, 23% attributed team issues as a cause, which puts it in the top three. Included in this category were lack of team diversity – from the business and personal side. The lack of professional expertise but also personal support were named a central to the failings of the business. However, more damning, research among VC’s showed that they attributed 65% of company failures to team issues.’  

 

5. VC’s perspective

“For investors not having a team is essentially a vote of no confidence, regardless of how amazing your product is. Balanced teams with one technical founder and one business founder raise 30% more money.

 

Does your startup need money? YES!Funded can help!

 

What does a startup scout do?

As the startup landscape in the Netherlands keeps expanding, new types of jobs keep springing up. For example the startup scout. But what do they do? Our very own Emma Kluwen answers that question and more in her interview with Sprout!

Read the whole interview, in Dutch, here.

Does it sound like your dream job? You’re in luck! We have a position open for a startup scout at YES!Delft. You’ll have to hurry though, because the application deadline is September 19th (17:00), 2019.

More information about the job and how to apply HERE.

How to validate your tech startup idea


SHORTLIST:
validating your tech startup idea do’s and don’ts

DO

  • Find (potential) customers with a pain
  • Understand the context around that pain
  • Assess if your technology can ease that pain
  • Find out what the costs related to the pain
  • Assess if your technology has benefits for the potential customer
  • Create quick build-measure-learn cycles and go through them often

DON’T

  • Push your tech startup onto your customers
  • Ask them what they would like to pay for it
  • Spend all your time and money on product development
  • Create slow build-measure-learn cycles and go through them only twice per year

 

Apply for our Validation Lab
to validate your business idea

Apply now
 


 

You’re a team of engineers and you’ve developed this great technology. It’s so great, in fact, that you’ve decided to turn it into a tech startup. But before anything, you need to make sure that there is indeed a market for it. You need to validate your business.

So, how do you validate a business? What processes are there to follow, and what pitfalls are there to avoid? As Program Manager at YES!Delft, Robert Jan van Vugt is the person to go to, if you want to know everything about finding your market-product fit. For this Expert Interview, he shared his thoughts and some much sought-after advice.

 

Finding a market for your technology

Finding a market for a tech idea or product is not nearly the same as finding a technology to solve a customers’ problem. Non-technology businesses often start by solving a problem for the customer.

“Tech ideas, on the other hand, start with the technology. Most entrepreneurs choose the technology based on their own interests and background [mostly engineering], and not on its business feasibility,” Robert Jan says.

The number-one reason for tech startups to fail is their inability to find a market for their technology. So nailing that product-market fit early on is crucial.

Say, you’ve developed a blockchain-related technology whose goal is to solve money transfer problems in Africa. Now, as noble as that may be, it may simply be too ambitious to start with. “Start easier,” Robert Jan advises. “Instead of focusing on Africa right away, start with a market that you have direct access to, and where the pain is just as high. Test your technology, make some sales, and then think of the next step. The number-two reason why startups fail is a lack of cash, so sales are key!

 

For more info about Validation Lab,
email our Startup Scout

Contact Emma
 

This smaller market may be your neighborhood, your town or your country. It may not be what you had imagined originally. But with an easy access to this market, you’ll be quick to find out the real business potential of your startup idea. Who is it for, how well does it solve a specific problem, and what are customers willing to pay for it? Go out and talk about it, to find out the answers. Get that down, so you can move on to your next step.

“In that sense, it’s not so much about finding a product-market fit, but rather about finding a market-product fit,” Robert Jan says. Look for a market until you have found one that fits the possible application(s) of your technology – instead of trying to change your product to fit a certain market.

 

Build, measure, and learn

Hanging on to this previous thought, your fastest way to market is by following a three-step process: build, measure, learn. As a tech company, you are tempted to start with a technology, build on it, measure the response, learn from it, and build again.

However, building hightech prototypes takes both time and money. It’s much more efficient if you build your market instead: work on assumptions, experiments, landing pages – everything to test, measure and learn from. Start building real prototypes only when you are sure about the market-product fit.

“The first step is to find the people with a pain, and talk to them,” Robert Jan says. “Why is this pain there, and (how) can your technology ease it?”

The key to identifying your future customers is to really understand their situation. Grasp the context around it. To what extent are their pains influencing their daily lives? What are they costing them, and what are they willing to spend to minimize them? Be able to match those pains with the gains your product can provide.

 

Test, measure, learn. Then repeat.

Gathering insights continuously will not only help you learn more about your target audience, but also find out if there is a real need for your technology. In the end, it will also help you understand if your startup idea is indeed scalable towards your dream market.

 

Apply for our Validation Lab
to validate your business idea

Apply now
 

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