The CEO of Relative Insight said businesses shouldn’t be intimidated by investors when raising money.
The firm, which aids brands with their consumer analytics, has raised several rounds of funding, including from the North West Fund and the Northern Powerhouse Investment Fund, through their partner Maven Capital.
However Ben Hookway told the joint BusinessCloud and Tech Manchester event ‘Tech Start-up Survival Guide’ how he has previously walked away from strategic investment as he felt it was wrong for the business and could compromise his possible exits.
“I think when you’re going out and raising investment, especially for the first time and you meet the investors, they seem worldly wise, they seem like they know everything and the reality is they don’t,” he said.
“Nobody knows your business like you do. The trick with talking to investors is first of all picking the metrics you believe represent your business the best and sticking to them and using those to tell the story.
“Don’t believe every piece of advice you get from an investor and don’t believe they know more than you because they don’t.”
Relative Insight helps companies get business value from language data they have access to so they can come up with a better strategy to engage with customers.
The event saw 12 entrepreneurs tell their successes and failures when starting a business.
Each speaker offered one pull-out piece of advice, including the right time to pivot and the dangers of going into business with friends.
Another entrepreneur urged people to invest in good legal advice after sharing his experiences of selling his half share in his previous business SRI Forensics for just £1.
Sean Murphy (pictured above), owner of expert witness services provider Evidential, told the audience of 75 at UKFast of the dangers of having a 50/50 share agreement if you end up wanting to take the company in different directions.
“It might seem like a big cost at the very start but I personally didn’t factor in originally the shareholder agreement,” he said.
“I think we could have done a lot better, we probably scrimped and saved on the original version of it but when it came to needing it, it could have been a very good insurance policy that could have stopped about a year’s worth of discussions.
“When you’re in a 50/50 partnership and you don’t have a mechanism to get out of it then one of the ways is to close it.
“I didn’t really want to do that so I gave it to them for £1, and already realised that my main customers would follow me as the person rather than the business and it proved right – looking back it was a good choice.”
Murphy launched Evidential in 2014 and specialises in making visual evidence understandable for courts. He has worked in a series of high profile cases including the Dale Cregan murder case and Hillsborough.
Serial start-up entrepreneur Anastasia Kenyon, founder of Kandi Cosmetics, advised the audience to bootstrap their business in the early days before raising investment.
“I think when you are starting a business and when you’re looking to move forward, investment isn’t always necessarily the first step,” she said.
“I think being able to build a business, bootstrap to the point where you then literally can’t survive without gaining investment, then it’s the time to do it. Start out and fly first, then get investment.”
She said too many start-ups lose their focus because they’re obsessed about raising investment.
Other speakers at the event included Anthony Chadwick, CEO of The Webinar Vet; Kobi McCardle, co-founder of Dr Fertility; Laura Beattie, co-founder of Careaux; Nile Henry, CEO of The Blair Project; Daniel Burton, CEO of Wondrwall Group; Gemma McCall, co-founder of Culture Shift; Gary Rohloff, co-founder and managing director of Laybuy; Abdul Alim, CEO and co-founder of Bidooh and Jack Barmby, CEO of Gnatta.
The event attracted more than 300,000 impressions on Twitter using the hashtag #BCSurvival. It was co-hosted by BusinessCloud editor Chris Maguire and Tech Manchester executive director Patricia Keating.