In funding, it’s important to answer the investor’s question. For example, when I ask a startup what their revenue is, I often get their story instead.
That’s okay-I like stories.
But when the story ends and there’s no indication of revenue, I often ask again. If I still don’t get the answer, I ask one more time. If no number is forthcoming I consider the revenue to be zero- which means they haven’t validated the market or product fit yet.
Likewise, with investment managers approaching me for their fundraise, I ask ‘what are the returns on the previous funds?’
If I don’t get a numerical answer, then it’s a zero- the past investors lost their money.
No answer means zero.
If you’re a startup make sure you sell something so you don’t have to give a story instead. Also, you’ll find that forecasts will mean more if you base it on some evidence of historical reality.
Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies.
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