Do investors prefer it if you nail down a very targeted, but small, niche of customers for your product, or demonstrate that it has wide potential?

   |       |   

Do investors prefer it if you nail down a very targeted, but small, niche of customers for your product, or demonstrate that it has wide potential? This is the eternal question for almost every business at almost every stage of its evolution. Whether you are BHP, Seek or Pie Face, your senior management and board need to review your product and service mix on a regular basis. For example, BHP decided to exit the steel processing business and spun out BlueScope Steel in 2002. At a similar time Seek could have expanded i

Read More

Is the economy slowing and, if so, how will that affect start-up investment?

   |       |   

There’s a bit of talk about at the moment about a slowdown in the Australian economy. How will this impact investment in Australia? Are start-up investors looking to pull back? Or are they optimistic about the next few years? Yes, some sectors of the Australian economy are slowing down but these are mostly sectors that are being challenged by disruptive online models, a high dollar or high fixed costs (or all three). But I have not seen evidence of start-up investors reducing their interest or capacity to support new ve

Read More

Do I need a “big name” on board to get investors?

   |       |   

Do I need a “big name” on board to get investors? I saw a story recently on how a start-up managed to get investors on board after they mentioned that Mike Cannon-Brooks had put money in. How much weight does having a “big name” involved have with other investors and should I concentrate on getting a well-known figure on board in order to lure others? As in many endeavours in life, no one likes being the first. Whether it is the first kid to jump off a diving board, the first patron to try a new restaurant, or the fi

Read More

Why is LinkedIn a much better business than Facebook?

   |       |   

The short answer is this... "three words". Commercial Intent Monetisation That is, users go to LinkedIn with a commercial purpose - to find a job, find a business contact, hire an employee, to do a deal. LinkedIn users do not gossip about food or movies. They do not play games or share pictures of dogs or sunsets. LinkedIn then monetises this content with subscription services, recruitment services and advertising. The result? The market has doubled the value of LinkedIn since it went public and

Read More

I know very little about finance or operations. Should I seek a co-founder?

   |       |   

How can I go about finding a business brain for my start-up?I’ve devised a new technology that I think has great potential, but I have little idea about financials, operations, etc.

How can I best pair up with a business co-founder in order to present a more rounded picture to investors?

You have raised an important issue for all company founders. At an early stage, founders need to decide whether to “go it alone” or to partner with others to grow the business.

It is rare for an

Read More

A potential investor claims to have overseas contacts. Should I trust them?

   |       |   

I’ve had an offer from an investor who says he has proven sales routes into Asia, which will help rapidly grow my business. How much work should I put into finding out how solid these connections are? Do I need to get on a plane and investigate it all myself? Seems like a lot of work and cost at the moment. There are different types of investors for early-stage businesses and they are commonly divided into two camps – “smart money” and “passive investors”. If the smart money investor brings i

Read More