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Qualities that get Pitchdrive excited in your Startup

One might think that Pitchdrive is only interested in the best startups with the perfect founding team and the perfect business model. An outstanding cap table is obviously the cherry on top. However, Pitchdrive is not looking for the perfect business. 

When we consider that 90% of startups fail, we need to carefully evaluate startups. At Pitchdrive, we qualify and validate startups with our data engine and our team of experts. 

Based on this experience, we’ve compiled a list of qualities that gets Pitchdrive excited in your startup:

 

Enthusiasm

Pitchdrive is interested in enthusiastic founders - your excitement is our excitement. How could you expect us to believe in your idea if you do not fully stand behind it? Are you fully committed to your business or do you only see it as a side hustle? We want to see your passion for your business idea and a go-getter attitude. You do not wait for somebody to tell you what to do - you are energetic, determined to be successful, and able to deal with new or difficult situations easily. 

 

Founding Team

Pitchdrive knows that investing in a startup means investing in people. The founding team behind the business is just as important as the idea itself. We look for a team that has both the skills and the personal qualities required to grow a startup into a successful company. Preferably the founding team has a complementary skillset and a matching personality type. Additionally, a clear founders’ agreement is a vital part of making sure you, your co-founders and your business are protected for the future. This agreements states who commits to what while also providing a contingent plan about how to continue the startup in the future. 

 

Market Validation

Once founders have drawn out their business idea, it is time to validate the business idea on the market. Market validation is the process of determining whether your product is of interest to a given target market. Even though there are multiple ways of validating your business idea, we believe that the best form of validation is 

  • (Pre-) Sales and Revenue
    Are your customers willing to pay for the solution you provide even before the launch? The advantage here is that you and your team are building a product that people actually want to buy from you.

  • Churn Rate
    It’s inevitable that every startup will lose customers. However, what’s important for a startup is knowing what a profitable level of loss is to the company. Churn is a measure of how many customers stop paying for the product or service over a typical 30-day period. 

  • Loyal Customers
    Having local customers is closely related to the above-mentioned KPI. Your ultimate goal should be retaining customers and making them loyal customers. Because it’s less expensive to retain customers than it is to acquire new ones, churn rate is an important metric when forecasting future growth. Startups that experience high churn should try to gather as much data as they can from their previous customers. Conducting interviews by phone or email can provide startups with useful insights and help them improve their business moving forward.

 

Raising Capital

Finance is one of the most important aspects of every startup. As a startup expands and becomes successful, each funding round serves as a stepping stone toward greater growth. However, it is important to know what the startup is raising money for. As Pitchdrive invests in (pre-)seed startups, we rather see raising money for progress in order to raise a next round, instead of raising for salary. 

Screenshot 2021-11-22 at 17.52.43

 

Raising capital for the next funding round means that the startup has the opportunity to scale. At that point, the founding team needs to ask itself: “Is the startup scalable? Can we expand this business idea to other countries?”. It is common for startups to collect best practices in one country and then further grow in other countries that are similar to the origin country in terms of culture and demographic data. This way it is easier for user acquisition which is essential for scaling the business. If the company cannot achieve high growth by leveraging its platform, it is no venture-backable company. 



Macro Risks

When it comes to business, there are no sure things as everything comes with a risk. In order to grow your company, you not only have to focus on micro risks, such as growth or legal battles, but also on macro risks. 

  • Security
    Preferably, the startup is not located in a country of war where the security of the company but also its people is questionable.

  • Hiring
    It is common that startups cannot provide a competitive salary - however, the founder needs to convince people to work for his/her company otherwise. This could be in the form of stock options but also by providing a flexible work schedule and a team-oriented atmosphere.

  • Confidence VS Criticism
    While it is important to be confident about your idea and to fully stand behind it, it is equally important to also be humble and accept criticism, advice and feedback. 

 

We want to give you the first 200k you need to grow your business. 

At Pitchdrive, we believe in letting founders be founders. This means we give you the cash to start and expand your business. Thanks to our network of seasoned entrepreneurs, we also give you the guidance and support you need to scale your business internationally.

We believe in giving you the freedom you need to be yourself and the funds you need to make your dream come true. Because in the right hands, 200k can change the world. 

 

Learn More About Pitchdrive  

Written by Lea Baudner

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