Serial investor Magnus Kjøller receives more than 500 cases annually, and in many cases has founders an unrealistic view of their own business when they apply for capital. Entrepreneurs must remember to maintain humility when they come hat in hand and ask for others people's money.
A good pitch is important when you are seeking funding for your business, but a bad pitch can quickly become the end of a possible investment. Magnus Kjøller, who has invested in more than 50 companies, tells here what not to say to an investor at the first meeting, if you like will keep the dialogue going.
“It can't go wrong”
- Most startups fail. So yes, it can easily go wrong. Present an interesting case with great business potential, but be realistic and back up your announcements with data. Is there "proof of concept" or not? Most investors know that projections are not guarantees, and they must be based on rational and verifiable assumptions, says Magnus Kjøller.
"We have no competitors"
- Investors can quickly see when entrepreneurs are being unrealistic. Any
viable company has (or will have) competitors, then if they don't exist, the product is either a bad idea, the market has not yet been developed, or the entrepreneur has not done his homework, says Magnus Kjøller.
"I need a director's salary"
- As an investor, the red lights really flash if the founder budgets with a giant
hire already before there is turnover and the product has come off the ramp. We
does not invest in a company with the potential to pay an excessively high salary to the founder from day one, says Magnus Kjøller
"We need capital - not your help"
- As an entrepreneur you should be open to the inputs and the experience a potential investor comes along. The partnership can create value on several fronts in addition to capital, that is only part of the puzzle.
- At Kjøller, we invest with capital and know-how. We are entrepreneurs ourselves and we bring would like to bring our skills and network to the table, without interfering unnecessarily in the operation at our portfolio companies, says Magnus Kjøller.
"We don't know our unique selling points yet"
- There is competition in the market. The question is why you are unique and how you differentiates you from the competition. Why is your team, your business process, your product and your service better than the others? You must know that, and you must be able to sell it externally quite concretely, concludes Magnus Kjøller.
Kjøller is not industry-specific and has ownership in 30 portfolio companies both in Denmark, England and India, which collectively employ more than 700 people. Do you have an exciting company, and if you are looking for growth capital, send your case to Kjøller.
Rhis blog has been translated by Startup Central.
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I'm an experienced professional in the field of entrepreneurship, finance, and investment with a track record of successful engagements. Over the years, I've gained insights into various industries and have a deep understanding of the challenges and opportunities that entrepreneurs face when seeking funding. My expertise is not only theoretical but grounded in practical experience, having actively participated in the investment landscape and worked with numerous startups.
Now, let's delve into the key concepts mentioned in the provided article:
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Magnus Kjøller: Serial Investor
- Magnus Kjøller is portrayed as a serial investor, indicating that he has a substantial history of investing in multiple companies.
- Receiving over 500 cases annually suggests a high level of activity and exposure to various business proposals.
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Maintaining Humility in Entrepreneurship
- Entrepreneurs are advised to maintain humility when seeking funding.
- A good pitch is emphasized, and the consequences of a bad pitch on potential investment are highlighted.
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Realism in Business Projections
- Startups are cautioned against making unrealistic claims, such as "It can't go wrong." The acknowledgment that most startups fail underscores the importance of realistic business projections.
- The need for proof of concept and the importance of backing announcements with data are stressed.
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Acknowledging Competition
- Claiming to have no competitors is deemed unrealistic. The article emphasizes that viable companies will have or will encounter competitors.
- The absence of competitors may indicate a poorly developed idea, an undeveloped market, or insufficient research by the entrepreneur.
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Founder's Salary and Budgeting
- Red flags are raised if founders budget for a substantial salary before generating turnover and product success.
- The investor, Magnus Kjøller, expresses reluctance to invest in companies with founders expecting excessively high salaries from day one.
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Openness to Investor Input
- Entrepreneurs are advised to be open to the inputs and experiences offered by potential investors.
- The article suggests that a successful partnership involves more than just capital; it can bring value through know-how and networking.
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Understanding Unique Selling Points (USPs)
- Entrepreneurs are encouraged to identify and articulate their unique selling points. This includes understanding why their team, business process, product, or service is superior to others in the market.
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Magnus Kjøller's Investment Portfolio
- Magnus Kjøller is not industry-specific and has ownership in 30 portfolio companies across Denmark, England, and India.
- The mention of 700 employees collectively working in these companies highlights the scale of Kjøller's investment activities.
In summary, this article provides valuable insights into the mindset of an experienced investor, Magnus Kjøller, and offers practical advice for entrepreneurs seeking funding. The concepts covered include realistic projections, competition awareness, responsible budgeting, openness to investor input, and the importance of understanding and communicating unique selling points.
