The main goal of the investor at the first meeting with the founders
The main goal of the investor at the first meeting with the founders is to understand how strong the founders are motivated, what is the startup's development strategy and how great the chances of success are.
In other words, the investor is trying to understand the following:
- Why did the founders choose this particular business?
- How committed are founders to the idea of a startup?
- What are the chances of success with this idea and how successful will founders be in life?
- If all goes well, how big will the business be and what will the investor earn from it in the future?
To clarify these nuances, the investor asks specific questions. For instance:
- What product are you working on?
- Why did you choose this product?
- Why is now the right time to work on your project?
- What is your unique advantage over your competitors?
From a conversation with a startup founder with a B2B product (enterprise software).
The startup is targeting the US market, but is geographically located in Russia and Belarus. Average annual projected income from a client is from 20 to 50+ thousand dollars.
Founder said they are being aggressively offered their services by growth hacking specialists. They ensure that in a couple of weeks, the startup can reach its first customers in the US and build a successful sales funnel. Moreover, these specialists are also geographically located in the CIS.
Nevertheless, if the founder really believes in the suggestions of "growth hacking" specialists, then you can offer them to work for a commission from sales. Although, in my opinion, this is also not the best option, tk. some "specialists" in the course of the sales process can achieve the fact that potential buyers will simply blacklist the startup and in the future it will be impossible to build normal relations with them.
Talking to the founders, I remembered the story that Peter Teale told in his book Zero to One. How they, then young founders of PayPal, recruited a super salesperson. Moreover, this specialist categorically refused options, premiums and commissions. The only super deal this seller closed was his $ 5,000 daily salary.
In a US B2B seller, previous industry experience and longstanding customer relationships are important. One familiar sales director with experience in medical equipment for 20+ years in Irvine shared that he was offered to become a partner in a Ukrainian IT company - he says he decided to start small - in the first year, no more than half a million dollars in sales. To my surprise, he replied that he knows everyone and has been friends in the market for 15 years.
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