I am an entrepreneur, I have a great idea but no investors, what can I do?
Answered by Richard Hall from http://www.growthbusiness.co.uk/
This is one of the most common questions that entrepreneurs face. More than 95 per cent of start-up ideas are funded through friends and family. Here’s why.
All of us have everyday random ideas that we believe could make an interesting start-up but we rarely act on them. The reality is that most ideas do not have the potential to generate a significant enterprise value to make a professional investor happy. So you turn to cousin James who knows that you will not run away with his money.
Even in the rare cases when ideas can generate value, the effort, resources, and uncertainty attached with commercialising them is beyond most individuals.
Let us assume that a person comes to us with an idea. How do you evaluate it? Most investors would immediately turn to the background of the inventor or entrepreneur. If the inventor has prior industry or functional experience that will be valuable in commercialising the concept, then investors are more likely to receive the idea favourably.
This does not mean that people with no experience will not get good ideas, only that they will have a harder time raising the resources. How would one overcome this? The most viable solution is to team up with or hire someone with specific, credible, and relevant industry experience and the social relationships that can help access investor networks. Not only does this investors greater confidence in your idea but also reassures you that you can count on someone to help you make the right moves in setting up the company and in developing and selling your product.
The simple truth is this – investing in a start-up is about confidence in the individual entrepreneur. People are likely to invest in an idea if they know who you are and believe you can make it work. If you can’t prove this right away, create a team that can.