Episode 29 Deconstructing Investment Myths for Early Stage Founders
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What investors want is not always aligned with what founders expect in how they appeal to investors. The gap between what investors expect and what founders believe when it comes to funding is often attributed to different goals and perspectives.
Investors are primarily focused on maximizing return on their investments and managing risks while founders are emotionally attached to their ideas and prioritize growth and innovation. This gap can lead to misalignment in expectations. Founders may not have a complete understanding of the investors’ decision-making process and criteria, so regardless of their own confidence in developing unique value to a market, it may not necessarily conform to these elements for which they are being judged.
In this time of inflation, uncertainty and rising interest rates, these conditions increase the cost of capital, which in turn, may result in downward rounds for startups, and ultimately influences the shift towards safer investments. While the environment plays a key role in determining whether a company is funded there are other factors at play.
We were pleased to host two seasoned investors in the startup space:
Karen Grant – has been involved in early stage investing since the 1990s, after a 12-year career at IBM. She has launched four angel-investor groups, operated a business incubator and a commercialization centre for the University of Toronto, and been a founder, investor and director of a number of technology companies.
David Wright – has spent his career supporting technology-enhanced, high-growth companies. He provides capital markets, corporate finance and valuation advisory services through Capital Advisors. He's a mentor for a few of Ontario’s Regional Innovation Centres, and was an equity research analyst, investment banker, and an executive director of an Angel Network.
Karen and David helped an understanding of what matters to investors and deconstruct the myths in startup investing especially in today’s climate.
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