One misconception some founders have while starting up is that a great idea is enough to raise seed funds. It is rare that an investor will invest in a company only on the basis of great idea, investors want to see some traction before they are willing to invest in a start-up. Initially , you may need to bootstrap ( run on the money that you get from paying customers) ; or arrange a small amount of capital , either through your savings or from your friends and families to get things going. Start developing your Minimum Viable Product and build your business step-by-step. Another misconception is that all young businesses are meant to raise funds. There are several businesses which are not suitable for VC money , because VCs need an exit, which means they demand exponential high growth. Don't forget that there are many great businesses who have never raised VC money ! Also, investor money can be an expensive way of raising funds, so do look for alternatives, including venture debt and crowd-funding.
• That investors can be fooled with buzz words like AI, ML: If anything, an overuse of jargon only upsets them • A great idea is enough: Investors want to see some prototype, user validation, team quality and huge growth potential before they even give you a second meeting • That it's a free ride: It's a big responsibility • That it lasts forever: It evaporates much faster than you projected • That if 5 investors have rejected the idea, perhaps it's no good: I know founders who were rejected by 36 investors before being decently funded • Any money is good: A bad choice in investors will be a costly decision in the long term
Running a start-up solo is an extremely challenging task. It is a good idea to have at-least one co-founder alongside, who can help you deal with the ups and downs you will encounter. If you don’t have any person in your circle who fits the role , then you will need to hunt long and hard to find the right co-founder . Look on online social networks; attend offline events; and reach out to your network of friends and ex-colleagues. Before joining hands with your potential co-founder , make sure that you have several meetings with the person . It's a good idea to go together on a 7-day holiday, to check if the chemistry is right. Do you have common interests and complementary skills ? Remember this is one of the most important decisions that you will have to make while building your business from scratch - and a mistake can prove to be very expensive later on ! Make sure you sign an inter-se agreement, in case you fall out later on.
One interesting thread on being careful while selecting a co-founder : https://twitter.com/tweetingva/status/1102435884014678017
Early stage investors care the most about two things: (1) the team . How driven is the team ? and are they capable to executing the mission they have set out on (2) how big the market opportunity is. Investors also look at the potential risks; the competitive moat; how differentiated is the offering; and whether investor could add any value to the business they are investing in. Investors come in all shapes and sizes, and many have a thesis they follow.