Hiruy Amanuel Shares 5 Fundamental Lessons Entrepreneurs Need to Learn
Understanding how investors think and approach a business transaction will help startup founders and small businesses raise more capital. That’s why you’ll want to approach investor analysis just like you would approach customer targeting or product development — with insight on how to use it to your advantage. In this article, Hiruy Amanuel shares five key lessons every entrepreneur needs to understand when impressing potential investors.
1. Be Invested Yourself
One of the best ways to show investors you believe in your product or idea is by having invested in it with your own money. Any worthy investor will ask you how much money you’ve invested already to get a sense of your commitment to the cause.
Investing your own money should create some sort of tangible outcome, whether it’s a viable prototype of your product or how you will serve your customers. That way, other investors can see what direction you’re headed and where to best place their support.
2. Be Dedicated
Building a business from scratch takes time, energy, and money. Investors understand you’re looking to them for the money, which means you should already fully dedicate your time and energy. If you’re only working on your business idea part-time, investors won’t see you as a true entrepreneur who’s willing to do whatever it takes to succeed.
3. Prove the Worth
It’s easy to show off a product or service and how it can somehow make everyone’s life better. What’s more challenging is proving to the investors that it will somehow make their financial lives better. They need to see how their investment will pay off for them in the future, not just for your company. Show them how taking a risk on you will be worth it for them, creating a win-win situation.
4. Be Realistic with Valuation
We’d all like to think our business is more valuable than it currently is. However, making outlandish predictions or presenting future earnings as current will only get you in trouble down the line. The reason you’ve gone to these investors in the first place is that they understand the bigger picture, which means they’ll be the first to call your bluff if you’ve overvalued your company.
5. Show Mastery
Even if you have the next big idea, no one is an island. Your startup will need support and expert advice along the way and taking the time to test and patent your product or service properly shows you’ve planned for bigger and better things.
You should surround yourself with as many experts as possible and show investors that these experts are also committed to making your vision a success. With a team of experts by your side, it will be harder for investors to find a reason to say “no.”
About Hiruy Amanuel
Hiruy Amanuel is an expert on technology and a devoted philanthropist. He has invested in numerous educational and technological initiatives in East Africa. Amanuel believes that groundbreaking technologies will be rapidly developed throughout the Horn of Africa as access to quality education and technology increases.
