Survey from Innogy backed UK Innovation Hub suggests founders’ foremost concern is that VCs trust them and understand their vision.
You can have all the money in the world, but it won’t get you into the latest hot start-up deals, says research from the newly formed UK Innovation Hub, and Tech City UK.
Personal chemistry with an investor and trust are what’s required if you want to get in with best startup founders, survey respondents told Innovation Hub, Tech City UK and community partners Seedcamp and 500 Startups, helping to create a startup “hierarchy of needs” at the same time.
Three fifths of those questioned said that “fulfilment” was key for them – establishing a personal relationship with an investor, gaining their trust, and working together informally, but even more important, it seems, was the “psychological” element.
Personal chemistry, i.e. an investor founders “like and trust, who is in tune with their product and vision”, achieved a near consensus amongst founders – it is clearly a very good, and presumably quite rare, thing.
At the “basic” level, ease of onboarding and a strong track record scored highly, and the idea of a “low-maintenance relationship” with an investor also found favour with two fifths of founders questioned.
At a more granular level, 66% of founders said they would reach out to angel investors, with less (54%) feeling comfortable about contacting VCs, whilst loans of any kind were generally unpopular. Customer acquisition and product development are the two most popular destinations for investor money, followed by talent, programming skills are the most sought after skills in the startup ecosystem, 63% of founders find investment through word of mouth, and founders most want to know about other startups in their space (68%) and information on new funds.
Of the 164 founders questioned, 44% said they believed they were capable of building a billion-dollar company.
It’s good to have goals – especially the one or two of you out there who really will build a unicorn!
The UK Innovation Hub has been created by German energy company Innogy, who already have a similar facility set up in Berlin, Tel Aviv and Silicon Valley.
The Hub will be investing into developing partnerships across pre-seed, seed and Series A funding rounds, investing into 5 core areas: Machine Economy, Smart & Connected, Urban Solutions, Disruptive Digital and Big Data.
““We’re excited to open in the UK and to work alongside brilliant startups developing products and services that could make a huge impact. We believe there is a great opportunity to support more startups across the country and work with them closely to support them as they scale to find product market fit and accelerate their customer acquisition.”
Thomas Birr, SVP, Innovation & Business Transformation for Innogy, commented.