A serial entrepreneur has said you have to ‘kiss a lot of frogs’ to gain the right investment for your business.
Steve Kelly, who has raised over £50m throughout his career, has shared his top tips on what investors would look for in a new company to spend their money.
Kelly spoke at BusinessCloud’s recent Tech Investment breakfast and said how the right investment can be ‘worth its weight in gold’ for a start-up, whereas the wrong investment can kill a business.
He is currently an advisor to his fourth business Smartkem after stepping down as chief executive last year.
Since 2009 he has raised £30m for the Manchester-based company which manufactures flexible screens for electronics, to create foldable phones and smart watches.
“You have to kiss a lot of frogs,” Kelly told BusinessCloud. “My top tips are do your research, make sure that you are able to concisely pitch (your offer) by starting with the pain you’re going to solve and demonstrate the inspiration that’s driven you to come to raise financials.
“Really work hard on demonstrating the results tangible you can achieve within that round of funding.
“I’ve always been involved in hard and deep tech and these are businesses that don’t scale like digital, so you can’t judge the scaling of hard tech by user numbers.
“They have ugly things like supply chains and products and quality systems – it takes longer to scale, which means you have to kiss a lot more frogs in the deep tech and hard tech sector.”
Kelly said new businesses should take investment when they have ‘proof of concept and some form of early demonstration’.
He also warned against the danger of taking too much investment too early as it can over-promise to an investor.
“I would say there’s a horses for courses approach in the sense that the earlier the business then the riskier the investment, therefore more things can go wrong – it’s more important that you can find investors that are aligned to your world view,” he said.
“Sometimes it’s better to have a lower valuation with the right investors than it is to have a high valuation, less dilution and the wrong investor.”
Kelly previously held a managerial position for industrial coatings company QC colours and CTO at anti-counterfeiting tech company Kromacorp, before founding printing firm DataLase and Smartkem.
Kelly was one of a number of entrepreneurs to speak at BusinessCloud’s Insight Tech Investment, at UKFast, which was sponsored by Praetura Ventures and watched by an audience of more than 110 people.