How to stop chasing and start attracting investors

27 February 2020

With an extensive ecosystem of early stage businesses, angel investors and venture capital funds, London has become the epicentre of the European start-up scene. In the midst of this plurality of enterprises, how can entrepreneurs stop chasing and start attracting investors? Jenny Tooth, CEO of the UK Business Angels Association and Malin Holmberg, Partner at Target Global – both speakers at the London Bootcamp 2020 programme – elaborate on how newly established companies validly can break through the noise.

London Bootcamp is an accelerator programme that focuses on helping Swedish tech businesses and start-ups to build a presence and connection with London and the UK. “The London Bootcamp programme is a very good way of giving Swedish entrepreneurs an opportunity to interact with investors. It is an ideal way of starting to make yourself attractive to investors, and not be chasing them or being on the outside,” says Jenny Tooth. With two decades of investment experience, Jenny is the CEO of the UK Business Angels Association, the trade body for angel and early-stage investing.

Steering in a clear direction
First and foremost, early stage businesses ought to develop a deep comprehension of the British market through essential market analysis. Jenny says: “Businesses must be very clear on how they can scale in the specific market. Investors are not just supporting a start-up, but also a potentially scaling business.” Furthermore, an integral strategic move is to establish a strong competitive position. Jenny continues: “It is incredibly important to bring either innovation or disruption to the market, in order to differentiate from the competitors.”

Prior to joining Target Global, Malin Holmberg was the CEO of Tele2 Netherlands. She has more than fifteen years of experience in telecommunication and over a decade of experience in M&A and due diligence. Due diligence is important for the type of investor that you are seeking. Malin says: “Even the most successful start-ups have ups and downs. It is vital that you have the right people supporting you, especially during the downs.” In addition, depending on the size of the market capitalisation, either crowdfunding, angel money or venture capital is the optimal access point for investment.

Standing out from the crowd
In order to distinguish itself and effectively attract capital, Malin means that an early stage business must convince investors of three specific parameters: “It has a solution to a real problem, it is targeting a large market and the team is the best suited to solve this problem and build a global unicorn. Exemplar storytelling and early metrics demonstrating product market fit will catch investors’ eyes.”
Jenny stresses the importance of distinctly communicating the rationale behind the business, as well as the personal incitements and passion of the entrepreneur. “It is really good to have a strong story about why you are setting up your business,” says Jenny. Malin agrees on the significant role of storytelling: “It is important to have a clear storyline and to deliver it with passion. A short, clear and inspiring deck shortens the time to get to a pitch meeting, provided that you hit the hygiene factors of a large addressable market and stellar team.”

As a matter of fact, one of the most important aspects of a business is the composition of its team, which according to Jenny must be balanced in two principal aspects – gender balance and balance of team skills. She explains: “I am very keen that there are females in the team that take on strong leadership positions. In terms of skills, we especially look at the capability of the team to move that business forward,” says Jenny.

Establishing a local market presence
Since geographical proximity facilitates the investors’ capability of business support, Jenny’s recommendation is to establish a local market presence in the United Kingdom in an early stage of business. “To establish here will certainly help you become more interesting to investors, by giving you opportunities to showcase yourself and raise awareness through pitching events,” says Jenny. Besides, a market presence does not necessarily require physical offices or production sites in the market. Jenny explains: “If you are an e-commerce or have a strong presence online, then understanding your customers can be completely global.”

Alternatively, a wise option is to “hire a local person with insight into the specific UK market and spend a significant amount of time together on the ground in the UK,” says Malin. Early stage businesses can also choose to partner with businesses with existing ties to the British market, or enter softly through an accelerator programme, according to Jenny. “Obviously, the one that the Swedish Chamber of Commerce is running is very valuable. The mentoring programme that is being offered is a good way of getting to meet and know investors.”

Strong potential and promising opportunities
Fortunately, Swedish businesses have a good reputation and bright outlook in the UK market, according to both Jenny and Malin. “I would characterise them as being quite focused, pragmatic, straight-forward and humble,” says Malin. Jenny agrees on the promising opportunities of Swedish start-ups in the British start-up scene: “I think that the real opportunity for Swedish businesses is first of all to establish the market access across the Nordic countries, as well as having a business that easily can transfer, thrive and grow here in the United Kingdom.”

                
Malin Holmberg                                  Jenny Tooth
Partner, Target Global                        CEO, UK Business Angels Association

London Bootcamp 2020
London Bootcamp is a one-week accelerator programme especially designed for Swedish tech businesses and start-ups looking to build a presence and connection with London and the UK. The programme takes place during London Tech Week, 8-12 June 2020, and is now open for registrations. London Bootcamp is a collaboration between the Swedish Chamber of Commerce for the UK and Startup Sweden, in partnership with the Swedish Agency for Economic and Regional Growth (Tillväxtverket), the Department for International Trade, Vinnova and the Swedish Energy Agency. Learn more on scc.org.uk.

By: Sara Apéria