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.
If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information. The first 3 companies are free for 6 months.
Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now!
If you have any questions, please contact us at info@tencapital.group.