Many entrepreneurs I work with proudly tell me how much work they’ve undertaken ‘pressure testing’ their business idea, to gain proof of concept and for feeling that their plan is now validated. Many view such validation as, in itself, making their idea investor-ready.
That view is wrong.
Investors don’t just want a great idea and a committed Founder, they also want certainty, stability and – ultimately – return on investment. In a practical sense this manifests as the startup having:
- a structured governance model;
- identified and secured its intangible assets; and,
- binding agreements with existing customers or third-party service providers.
If you don’t have these, what are you actually asking people to invest in?
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