The concept revolves around a radical new approach to marketing, I would dare to say never done before. BUT "radical new approach" many times translates to difficulty in understanding the concept, uncertainty and fear of investment. What would you do? How would you approach it?
Thank you for asking your question here on Clarity. The healthy discussion will also benefit many members of the community.
The first company that I built and successfully sold, a BBS turned ISP (aka "Internet Service Provider", more here: http://www.linkedin.com/in/exitcoach), was indeed a "radical new approach". The internet back in the mid '90s was so "radical" that Elon Musk said this about it: "Back in '95 there weren't very many people on the internet, and certainly nobody was making any money at all. Most people thought the internet was going to be a fad." (video here: http://ElonMusk.fyi.to/YoungMillionaire). That company took me 7 years to build and sell, VERY painful first few years. No money for new tyres, then no money for petrol, eventually no money for public transportation.
My second company, a free web hosting service, provided a radical new user experience. Rather than hosting your free web page on an "ugly" Geocities URL you could use an elegant www.yourname.hpg.com.br, among other clever enhancements. But at the core, hpG was no different than Geocities, Tripod or many of the other contenders. Apart from the enhanced user experience it was because we had a SOUND exit strategy from day 1 that we sold that company in 18 months and with a valuation 3X higher than my first company. BOTH with NO outside investors btw.
Personally, I prefer the kind of "radical new approach" that enhances the user experience, zooming on an image by spreading 2 fingers over the screen (thank you Steve Jobs), than the radical kind of time/money that goes into the R&D required to create a palmtop, only for another clever entrepreneur to come along and leverage on your previous investment and reap the rewards thereof. Like what happened to Xerox, the inventor of the GUI, when Microsoft/Apple had a sneak peak at it.
As far as investors go, it's a zoo out there. And "marrying" the wrong one can have grave consequences for the unexperienced entrepreneur. Most of the "big investors" are taking a portfolio approach (not that you cannot extract value from such a relationship) and many of the "smaller more manageable investors" bring little or no value other than financial capital.
What you really want to find is intellectual capital, investors that have previously built and sold successful companies themselves before. The Marc Andreessen's of the world. Investor's that care much more about WHO you are, WHY you are pursuing entrepreneurial success, and that are asking themselves WHAT they can do to help you make your dreams come true. Investors that invest in true founders and not fundraisers.
You may want to also look at this other related question here on Clarity: https://clarity.fm/questions/4857/what-is-the-ideal-time-to-reach-investors
If there's anything I can do to help you build and sell a successful startup, feel free to engage me here on Clarity. Thank you!
Answered 5 years ago
I have written about it in my book 'Startup Easy'. I would recommend you to use 'Rifle Approach' for finding and pitching the investors.
To be honest, you don't have to manage the investors, they will manage you (or at least try to administer).
I will be happy to discuss over a call.
Answered 5 years ago
Sorry to see you haven't had any answers to date. Maybe mine will provoke thoughtful answers from others. I'll get started by saying that I've been in your boat. "Never been done before" and "radical new approach" create excitement for entrepreneurs but fear (e.g. "I'm not touching that!") for some investors. Nevertheless, my opinion (with little to go by) is to not let that stop you. Present your new concept in all its glory. Develop a powerful overview which will generate a big "WOW" from investors. Include practical examples that bring the concept to life from a client's perspective. Describe total start-up costs, delivery costs, customer benefits and a phased implementation to minimize the upfront investment. Your phased implementation plan will reduce the fear you created when you described the concept and the total investment required before the business generates cash. Example: Phase I: Convert the concept into a service and define a sales pitch approved by an advisory group. Phase II: Prove a key component on a small scale or limited scope test. Incorporate standard controls in your test design so investors trust the test results vs. existing methods. Phase III: Expand the test with additional components, an expanded scope and/or an additional client. Each phase should conclude with additional investment for the next phase. Whether there are 3, 4 or 5 phases in the schedule depend on what you have to prove before roll-out. Positive results after each phase will build investor confidence and gradually improve your chances for long term success. I would be happy to help you create the plan and overview.
Answered 5 years ago